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BAR OPERATIONS 2022 CIVIL LAW (AND PRACTICAL EXERCISES)
TABLE OF CONTENTS
PART I: CIVIL LAW I ............................................................................................................................ 18
I. PRELIMINARY TITLE .................................................................................................................... 18
A. EFFECT AND APPLICATION OF LAWS .................................................................................... 18

1. WHEN LAW TAKES EFFECT ..................................................................................................... 18
2. RETROACTIVITY OF LAWS ....................................................................................................... 19
3. MANDATORY OR PROHIBITORY LAWS ................................................................................... 19
4. WAIVER OF RIGHTS ................................................................................................................ 19
5. REPEAL OF LAWS .................................................................................................................... 20
6. JUDICIAL DECISIONS ............................................................................................................... 20
7. DOUBTFUL STATUTES ............................................................................................................. 21
8. CUSTOMS................................................................................................................................ 21
9. RULE ON PERIODS .................................................................................................................. 21
10.CONFLICT OF LAWS (UNDER THE CIVIL CODE) ....................................................................... 21
B. HUMAN RELATIONS............................................................................................................. 24
II. PERSONS AND FAMILY RELATIONS.............................................................................................. 29
A. PERSONS ............................................................................................................................. 30
1. CIVIL PERSONALITY (ART. 44-47, NCC) ................................................................................... 30
2. USE OF SURNAMES ................................................................................................................. 31
3. ENTRIES IN THE CIVIL REGISTRY AND CLERICAL ERROR LAW (R.A. 9048, AS AMENDED) ...... 31
4. ABSENCE ................................................................................................................................. 32
A. CIVIL CODE PROVISIONS............................................................................................... 32
B. PRESUMPTIVE DEATH OF ABSENT SPOUSE UNDER THE FAMILY CODE....................... 33
B. MARRIAGE .......................................................................................................................... 34
1. REQUISITES OF MARRIAGE ..................................................................................................... 34
2. EXEMPTION FROM LICENSE REQUIREMENT .......................................................................... 34
3. MARRIAGES SOLEMNIZED ABROAD AND FOREIGN DIVORCE ................................................ 36
4. VOID AND VOIDABLE MARRIAGES ......................................................................................... 38
A. ANNULMENT UNDER ARTICLE 36 (AS RECENTLY ARTICULATED UNDER TAN-ANDAL V.
ANDAL, G.R. NO. 196359, MAY 11, 2022; TOTALITY OF EVIDENCE RULE) ................... 41
C. LEGAL SEPARATION ............................................................................................................. 45
1. GROUNDS ............................................................................................................................... 45
2. DEFENSES................................................................................................................................ 45
3. PROCEDURE ............................................................................................................................ 45
4. EFFECTS OF FILING PETITION.................................................................................................. 45
5. EFFECTS OF PENDENCY........................................................................................................... 45
6. EFFECTS OF DECREE OF LEGAL SEPARATION (ART. 63) .......................................................... 46
7. RECONCILIATION .................................................................................................................... 46
8. EFFECT OF DEATH OF ONE OF THE PARTIES ........................................................................... 46
D. RIGHTS AND OBLIGATIONS BETWEEEN HUSBAND AND WIFE............................................... 47
E. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE ....................................................... 47
1. GENERAL PROVISIONS ............................................................................................................ 47
2. DONATIONS BY REASON OF MARRIAGE ................................................................................ 48
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3. ABSOLUTE COMMUNITY OF PROPERTY ................................................................................ 49

4. CONJUGAL PARTNERSHIP OF GAINS ...................................................................................... 51
5. SEPARATION OF PROPERTY AND ADMINISTRATION OF COMMON PROPERTY BY ONE SPOUSE
DURING THE MARRIAGE .............................................................................................................. 54
6. REGIME OF SEPARATION OF PROPERTY ................................................................................. 54
7. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE .......................................................... 56
F. FAMILY HOME (NOTE: THIS SECTION INCLUDES THE WHOLE DISCUSSION ON FAMILY) ........ 58
1. FAMILY (ART. 149) .................................................................................................................. 58
2. FAMILY HOME ........................................................................................................................ 59
G. PATERNITY AND FILIATION .................................................................................................. 60
1. LEGITIMATE CHILDREN ........................................................................................................... 60
2. PROOF OF FILIATION .............................................................................................................. 60
3. ILLEGITIMATE CHILDREN ........................................................................................................ 62
4. LEGITIMATED CHILDREN ........................................................................................................ 63
H. ADOPTION........................................................................................................................... 65
1. DOMESTIC ADOPTION (R.A. NO. 8552) .................................................................................. 65
A. WHO MAY ADOPT ........................................................................................................ 65
B. WHO MAY BE ADOPTED ............................................................................................... 65
C. RIGHTS OF AN ADOPTED CHILD ................................................................................... 66
D. INSTANCES AND EFFECTS OF RESCISSION .................................................................... 66
2. INTER-COUNTRY ADOPTION (RA 8043) .................................................................................. 67
A. WHEN ALLOWED .......................................................................................................... 67
B. WHO MAY ADOPT ........................................................................................................ 67
C. WHO MAY BE ADOPTED ............................................................................................... 67
I. SUPPORT ............................................................................................................................. 68
1. WHAT IT COMPRISES .............................................................................................................. 68
2. WHO ARE OBLIGED TO GIVE SUPPORT .................................................................................. 68
3. SOURCE OF SUPPORT ............................................................................................................. 68
4. ORDER OF SUPPORT ............................................................................................................... 69
5. AMOUNT OF SUPPORT ........................................................................................................... 69
6. MANNER AND TIME OF PAYMENT ......................................................................................... 69
7. RENUNCIATION AND TERMINATION ...................................................................................... 69
8. SUPPORT PENDENTE LITE ....................................................................................................... 69
9. PROCEDURE IN APPLICATION FOR SUPPORT ......................................................................... 70
J. PARENTAL AUTHORITY ........................................................................................................ 70
1. GENERAL PROVISIONS ............................................................................................................ 70
2. SUBSTITUTE PARENTAL AUTHORITY ...................................................................................... 71
3. SPECIAL PARENTAL AUTHORITY ............................................................................................. 71
4. EFFECT OF PARENTAL AUTHORITY OVER THE CHILD’S PERSON ............................................ 72
5. EFFECTS OF PARENTAL AUTHORITY OVER THE CHILD’S PROPERTY ....................................... 72
6. SUSPENSION OR TERMINATION OF PARENTAL AUTHORITY .................................................. 73
7. SOLO PARENTS ACT (R.A. NO. 8972) ...................................................................................... 73
K. EMANCIPATION ................................................................................................................... 74
1. CAUSE OF EMANCIPATION ..................................................................................................... 74
2. EFFECT OF EMANCIPATION .................................................................................................... 74
L. RETROACTIVITY OF FAMILY CODE ........................................................................................ 74
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III. SUCCESSION ............................................................................................................................... 76
A. GENERAL PROVISIONS ......................................................................................................... 76

1. DEFINITION ............................................................................................................................. 76
2. SUCCESSION OCCURS AT THE MOMENT OF DEATH .............................................................. 76
3. KINDS OF SUCCESSORS ........................................................................................................... 77
B. TESTAMENTARY SUCCESSION .............................................................................................. 77
1. WILLS ...................................................................................................................................... 77
2. INSTITUTION OF HEIRS ........................................................................................................... 89
3. SUBSTITUTION OF HEIRS ........................................................................................................ 92
4. CONDITIONAL TESTAMENTARY DISPOSITIONS AND DISPOSITIONS WITH A TERM ............... 94
5. LEGITIME ................................................................................................................................ 96
6. DISINHERITANCE................................................................................................................... 104
7. LEGACIES AND DEVISES ........................................................................................................ 109
C. LEGAL AND INTESTATE SUCCESSION .................................................................................. 113
1. GENERAL PROVISIONS; RELATIONSHIP AND RIGHT OF REPRESENTATION .......................... 113
A. RELATIONSHIP ............................................................................................................ 114
B. RIGHT OF REPRESENTATION ...................................................................................... 115
2. ORDER OF INTESTATE SUCCESSION ..................................................................................... 116
D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION .................................... 121
1. RIGHT OF ACCRETION ........................................................................................................... 121
2. CAPACITY TO SUCCEED BY WILL OR INTESTACY ................................................................... 121
3. ACCEPTANCE AND REPUDIATION OF INHERITANCE ............................................................ 125
4. PARTITION AND DISTRIBUTION OF ESTATE .......................................................................... 128
IV. OBLIGATIONS AND CONTRACTS ................................................................................................ 132
A. OBLIGATIONS .................................................................................................................... 132

1. GENERAL PROVISIONS .......................................................................................................... 132
A. DEFINITION ................................................................................................................. 132
B. ELEMENTS OF AN OBLIGATION .................................................................................. 132
C. SOURCES OF OBLIGATIONS ........................................................................................ 133
2. NATURE AND EFFECT ............................................................................................................ 135
A. OBLIGATION TO GIVE ................................................................................................. 135
B. OBLIGATION TO DO OR NOT TO DO .......................................................................... 135
C. TRANSMISSIBILITY OF OBLIGATIONS ......................................................................... 136
D. PERFORMANCE OF OBLIGATIONS .............................................................................. 136
E. BREACHES OF OBLIGATIONS ...................................................................................... 136
F. REMEDIES AVAILABLE TO CREDITOR IN CASES OF BREACH ....................................... 141
3. KINDS OF OBLIGATIONS ....................................................................................................... 141
A. PURE OBLIGATIONS .................................................................................................... 141
B. CONDITIONAL OBLIGATIONS ..................................................................................... 141
C. OBLIGATIONS WITH A PERIOD OR A TERM ................................................................ 143
D. ALTERNATIVE OR FACULTATIVE OBLIGATIONS .......................................................... 145
E. JOINT AND SOLIDARY OBLIGATIONS .......................................................................... 146
F. OBLIGATIONS WITH A PENAL CLAUSE ....................................................................... 150
4. EXTINGUISHMENT ................................................................................................................ 151
A. PAYMENT OR PERFORMANCE .................................................................................... 152
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B.LOSS OF DETERMINABLE THING DUE OR IMPOSSIBILITY OR DIFFICULTY OF

PERFORMANCE .......................................................................................................... 158
C. CONDONATION OR REMISSION OF DEBT .................................................................. 159
D. CONFUSION ................................................................................................................ 160
E. COMPENSATION......................................................................................................... 160
F. NOVATION .................................................................................................................. 161
B. CONTRACTS ....................................................................................................................... 164
A. STAGES OF CONTRACTS ............................................................................................. 164
B. CLASSIFICATIONS........................................................................................................ 164
2. ESSENTIAL REQUISITES ......................................................................................................... 166
A. CONSENT .................................................................................................................... 166
B. SUBJECT MATTER (SM)............................................................................................... 170
C. CAUSE OR CONSIDERATION ....................................................................................... 171
3. REFORMATION OF INSTRUMENTS ....................................................................................... 172
4. INTERPRETATION OF CONTRACTS ........................................................................................ 173
5. RESCISSIBLE CONTRACTS ...................................................................................................... 173
6. VOIDABLE CONTRACTS ......................................................................................................... 175
7. UNENFORCEABLE CONTRACTS ............................................................................................. 176
8. VOID OR INEXISTENT CONTRACTS........................................................................................ 177
C. NATURAL OBLIGATIONS .................................................................................................... 179
D. ESTOPPEL .......................................................................................................................... 180
E. TRUSTS .............................................................................................................................. 180
1. EXPRESS TRUST ..................................................................................................................... 181
2. IMPLIED TRUST ..................................................................................................................... 182
A. IMPLIED TRUST WHEN PROPERTY IS GRANTED TO ONE/TRUSTEE BUT PRICE IS PAID
BY ANOTHER FOR THE INTEREST OF BENEFICIARY .................................................... 183
B. IMPLIED TRUST IN DONATION ................................................................................... 183
C. IMPLIED TRUST IN SALE OF PROPERTY ...................................................................... 183
D. IMPLIED TRUST IN CO-OWNERSHIP ........................................................................... 183
E. IMPLIED TRUST IN SUCCESSION ................................................................................. 183
F. PROPERTY CONVEYED IN RELIANCE UPON HIS DECLARED INTENTION TO HOLD IT FOR
ANOTHER.................................................................................................................... 184
G. AN ABSOLUTE CONVEYANCE TO SECURE PERFORMANCE OF OBLIGATION .............. 184
H. TRUSTEE’S USE OF FUNDS HELD IN TRUST ................................................................ 184
I. PROPERTY ACQUIRED THROUGH MISTAKE OR FRAUD.............................................. 184
F. QUASI-CONTRACTS............................................................................................................ 185
V. SALES........................................................................................................................................ 188
A. NATURE AND FORM .......................................................................................................... 188

1. ESSENTIAL REQUISITES ......................................................................................................... 188
A. ELEMENTS OF A CONTRACT OF SALE: (CSP)............................................................... 188
B. REQUISITES OF A VALID SUBJECT MATTER (ARTS. 1459-1465) ................................. 192
C. REQUISITES FOR A VALID PRICE (REM-C) ................................................................... 193
2. PERFECTION OF SALES .......................................................................................................... 195
3. CONTRACT OF SALE V. CONTRACT TO SELL .......................................................................... 195
B. CAPACITY TO BUY OR SELL ................................................................................................. 196
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1. ABSOLUTE INCAPACITY......................................................................................................... 196

2. RELATIVE INCAPACITY .......................................................................................................... 196
C. EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST ................................ 198
D. OBLIGATIONS OF VENDOR ................................................................................................. 198
1. OBJECTS THAT THE VENDOR HAS TO DELIVER: (THI-F-A) .................................................... 198
2. OBLIGATIONS OF THE VENDOR ............................................................................................ 198
E. OBLIGATIONS OF VENDEE .................................................................................................. 200
F. BREACH OF CONTRACT ...................................................................................................... 201
1. REMEDIES ............................................................................................................................. 201
A. REMEDIES OF SELLER IN CASE OF MOVABLES ........................................................... 201
B. REMEDIES OF SELLER IN CASE OF SALE OF IMMOVABLES ......................................... 202
C. REMEDIES OF BUYER .................................................................................................. 202
2. RECTO LAW AND MACEDA LAW........................................................................................... 203
A. RECTO LAW: SALE OF MOVABLES ON INSTALLMENT (ARTS. 1484-1486) ................. 203
B. MACEDA LAW (R.A. 6552) .......................................................................................... 204
3. OTHER REMEDIES ................................................................................................................. 205
A. REMEDIES IN DOUBLE SALES...................................................................................... 205
B. REMEDY OF RESCISSION IN CONTRACTS COVERING IMMOVABLES (ARTS. 1191 &
1592) 206
G. EXTINGUISHMENT ............................................................................................................. 207
1. IN GENERAL .......................................................................................................................... 207
2. PACTO DE RETRO/CONVENTIONAL REDEMPTION (SALE WITH RIGHT TO REPURCHASE) ... 207
3. EQUITABLE MORTGAGE ....................................................................................................... 208
4. LEGAL REDEMPTION ............................................................................................................. 209
H. ASSIGNMENT OF CREDITS .................................................................................................. 211
VI. LEASE........................................................................................................................................ 214
A. GENERAL PROVISIONS ....................................................................................................... 214

1. LEASE OF THINGS.................................................................................................................. 214
2. LEASE OF WORK AND SERVICES ........................................................................................... 214
B. RIGHTS AND OBLIGATIONS OF THE LESSOR AND OF THE LESSEE ........................................ 215
1. OBLIGATIONS OF THE LESSOR (ART. 1654) (DNM) .............................................................. 215
2. OBLIGATIONS OF THE LESSEE (ART. 1657) (PUP) ................................................................. 215
VII. PARTNERSHIP ........................................................................................................................... 220
A. GENERAL PROVISIONS ....................................................................................................... 220

1. DEFINITION ........................................................................................................................... 220
2. ELEMENTS ............................................................................................................................. 220
3. CHARACTERISTICS................................................................................................................. 221
4. RULES TO DETERMINE EXISTENCE ........................................................................................ 221
5. PARTNERSHIP TERM ............................................................................................................. 221
6. PARTNERSHIP BY ESTOPPEL ................................................................................................. 222
7. PARTNERSHIP AS DISTINGUISHED FROM JOINT VENTURE .................................................. 222
8. PROFESSIONAL PARTNERSHIP .............................................................................................. 223
9. MANAGEMENT ..................................................................................................................... 224
B. OBLIGATIONS OF THE PARTNERS ....................................................................................... 224
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1. RIGHTS AND OBLIGATIONS OF THE PARTNERSHIP .............................................................. 224

2. OBLIGATIONS OF PARTNERS AMONG THEMSELVES ............................................................ 225
3. OBLIGATIONS OF PARTNERS TO THIRD PERSONS ................................................................ 228
C. DISSOLUTION AND WINDING UP ....................................................................................... 230
1. CAUSES OF DISSOLUTION (CIVIL CODE, ART. 1830) ............................................................. 230
2. EFFECTS OF DISSOLUTION .................................................................................................... 231
A. AUTHORITY OF PARTNER TO BIND PARTNERSHIP ..................................................... 231
B. QUALIFICATIONS ........................................................................................................ 231
C. POST DISSOLUTION (CIVIL CODE, ART. 1834) ............................................................ 231
3. RIGHTS OF PARTNERS UPON DISSOLUTION ......................................................................... 231
A. RIGHTS OF PARTNER WHERE DISSOLUTION NOT IN CONTRAVENTION OF AGREEMENT
232
B. RIGHTS OF PARTNER WHERE DISSOLUTION IN CONTRAVENTION OF AGREEMENT . 232
C. RIGHTS OF INJURED PARTNER WHERE PARTNERSHIP CONTRACT IS RESCINDED ON
GROUND OF FRAUD/MISREPRESENTATION BY ONE PARTY (CIVIL CODE, ART. 1838)
232
D. SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS ................................................... 232
4. WHEN BUSINESS OF DISSOLVED PARTNERSHIP IS CONTINUED .......................................... 232
5. PERSONS AUTHORIZED TO WIND UP ................................................................................... 232
D. LIMITED PARTNERSHIP ...................................................................................................... 233
1. CHARACTERISTICS OF LIMITED PARTNERSHIP ..................................................................... 233
2. GENERAL PARTNERS V. LIMITED PARTNERS ........................................................................ 233
3. REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP ............................................ 233
4. CONSENT/RATIFICATION OF ALL LIMITED PARTNERS NEEDED............................................ 234
5. RIGHTS OF LIMITED PARTNERS ............................................................................................ 234
6. REQUISITES FOR RETURN OF CONTRIBUTION OF LIMITED PARTNER .................................. 234
7. LIABILITIES OF A LIMITED PARTNER ..................................................................................... 234
8. DISSOLUTION OF LIMITED PARTNERSHIP............................................................................. 235
9. AMENDMENT OF CERTIFICATE OF PARTNERSHIP ................................................................ 235
VIII. AGENCY .................................................................................................................................... 238
A. DEFINITION OF AGENCY..................................................................................................... 238

2. ESSENTIAL ELEMENTS (CROW) ............................................................................................. 239
B. NATURE, FORMS, AND KINDS OF AGENCY ......................................................................... 239
1. NATURE OF RELATIONSHIP................................................................................................... 239
2. OTHER CLASSIFICATIONS OF AGENCY .................................................................................. 241
A. AS TO MANNER OF CREATION ................................................................................... 241
B. AS TO CHARACTER...................................................................................................... 241
C. AS TO EXTENT OF BUSINESS OF THE PRINCIPAL ........................................................ 241
D. AS TO AUTHORITY CONFERRED ................................................................................. 241
E. AS TO NATURE AND EFFECTS ..................................................................................... 241
3. FORMS OF AGENCY .............................................................................................................. 241
4. KINDS OF AGENCY ................................................................................................................ 243
A. BASED ON BUSINESS OR TRANSACTIONS ENCOMPASSED ........................................ 243
B. WHETHER IT COVERS LEGAL MATTERS ...................................................................... 243
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C.
WHETHER IT COVERS ACTS OF ADMINISTRATION OR ACTS OF DOMINION – GENERAL
POWER VS. SPECIAL POWER OF ATTORNEY .............................................................. 244
5. HOW AGENCY IS REVOKED ................................................................................................... 246
C. OBLIGATIONS OF THE AGENT ............................................................................................ 247
1. GENERAL OBLIGATIONS........................................................................................................ 247
2. EFFECTS OF AGENT’S ACTS TO PRINCIPAL’S LIABILITY ......................................................... 247
3. APPOINTMENT OF SUB-AGENT ............................................................................................ 248
4. RESPONSIBILITY OF TWO (2) OR MORE AGENTS APPOINTED SIMULTANEOUSLY ............... 248
5. OBLIGATION RULES FOR COMMISSION AGENTS ................................................................. 251
D. OBLIGATIONS OF THE PRINCIPAL ....................................................................................... 251
1. OBLIGATIONS OF THE PRINCIPAL TO THE AGENT ................................................................ 251
2. RULES ON LIABILITY OF TWO (2) OR MORE PRINCIPALS ...................................................... 252
3. PRINCIPAL’S LIABILITIES FOR EXPENSES ............................................................................... 252
4. AGENCY BY ESTOPPEL .......................................................................................................... 252
5. PRINCIPAL'S REVOCATION OF THE AGENCY ......................................................................... 253
6. PRINCIPAL’S LIABILITY FOR DAMAGES DESPITE REVOCATION ............................................. 253
E. MODES OF EXTINGUISHMENT ........................................................................................... 254
1. HOW AGENCY IS EXTINGUISHED .......................................................................................... 254
2. OTHER MODES...................................................................................................................... 254
3. EXCEPTIONS TO EXTINGUISHMENT BY DEATH..................................................................... 254
IX. CREDIT TRANSACTIONS............................................................................................................. 257
A. LOAN ................................................................................................................................. 257

1. IN GENERAL .......................................................................................................................... 257
2. COMMODATUM ................................................................................................................... 258
3. SIMPLE LOAN ........................................................................................................................ 260
4. INTERESTS ON LOAN ............................................................................................................ 260
B. DEPOSIT ............................................................................................................................ 263
C. GUARANTY AND SURETYSHIP ............................................................................................ 271
D. QUASI-CONTRACTS............................................................................................................ 281
X. TORTS AND DAMAGES .............................................................................................................. 284
A. TORTS ............................................................................................................................... 284

1. ELEMENTS ............................................................................................................................. 284
2. CULPA AQUILIANA V. CULPA CONTRACTUAL V. CULPA CRIMINAL ...................................... 284
3. VICARIOUS LIABILITY ............................................................................................................ 285
A. FATHER/MOTHER FOR THEIR MINOR CHILDREN. ...................................................... 285
B. GUARDIANS ARE LIABLE FOR THE MINORS AND INCAPACITATED PERSONS UNDER
THEIR  AUTHORITY. ................................................................................................... 285
C. SCHOOLS, ADMINISTRATORS AND TEACHERS, AND INDIVIDUALS, ENTITIES OR
INSTITUTIONS ENGAGED IN CHILD CARE HAVING SPECIAL PARENTAL AUTHORITY
OVER CHILDREN. ........................................................................................................ 285
D. OWNERS/MANAGERS OF ESTABLISHMENT OR ENTERPRISE FOR THEIR EMPLOYEES.  
286
E. EMPLOYERS FOR THEIR EMPLOYEES AND HOUSEHOLD HELPERS.   ......................... 286
F. STATE FOR THEIR SPECIAL AGENTS. ........................................................................... 286
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G.TEACHERS/HEADS OF ESTABLISHMENT OF ARTS AND TRADES FOR THEIR PUPILS/

STUDENTS/APPRENTICES (ART. 2180, NCC)............................................................... 286
4. RES IPSA LOQUITUR .............................................................................................................. 286
5. LAST CLEAR CHANCE............................................................................................................. 287
6. DAMNUM ABSQUE INJURIA ................................................................................................. 287
B. PROXIMATE CAUSE............................................................................................................ 288
C. NEGLIGENCE ...................................................................................................................... 290
1. STANDARD OF CARE ............................................................................................................. 290
2. PRESUMPTIONS .................................................................................................................... 291
D. DAMAGES ......................................................................................................................... 291
2. KINDS OF DAMAGES ............................................................................................................. 291
A. ACTUAL DAMAGES ..................................................................................................... 291
B. MORAL DAMAGES ...................................................................................................... 297
C. NOMINAL DAMAGES .................................................................................................. 298
D. TEMPERATE DAMAGES .............................................................................................. 298
E. LIQUIDATED DAMAGES .............................................................................................. 298
F. EXEMPLARY DAMAGES .............................................................................................. 298
3. IN CASE OF DEATH ................................................................................................................ 299
PART II: CIVIL LAW II (AND PRACTICAL EXERCISES) ........................................................................... 308
I. PROPERTY ................................................................................................................................ 308
A. CLASSIFICATION OF PROPERTY .......................................................................................... 309

1. IMMOVABLES ....................................................................................................................... 309
2. MOVABLES ............................................................................................................................ 311
B. OWNERSHIP ...................................................................................................................... 312
A. BUNDLE OF RIGHTS .................................................................................................... 312
B. DISTINCTION BETWEEN REAL AND PERSONAL RIGHTS ............................................. 313
C. MODES OF ACQUIRING OWNERSHIP ......................................................................... 313
D. LIMITATIONS OF OWNERSHIP .................................................................................... 313
2. RULES OF ACCESSION ........................................................................................................... 314
A. FOR IMMOVABLES ..................................................................................................... 315
B. FOR MOVABLES .......................................................................................................... 320
C. RIGHTS OF BUILDER/PLANTER/SOWER IN GOOD FAITH ........................................... 322
C. CO-OWNERSHIP ................................................................................................................ 325
1. CHARACTERISTICS OF CO-OWNERSHIP ................................................................................ 325
2. SOURCES OF CO-OWNERSHIP .............................................................................................. 325
3. RIGHTS OF CO-OWNERS ....................................................................................................... 325
4. TERMINATION OF CO-OWNERSHIP ...................................................................................... 327
D. POSSESSION ...................................................................................................................... 329
2. KINDS OF POSSESSION.......................................................................................................... 329
3. ACQUISITION OF POSSESSION .............................................................................................. 330
4. EFFECTS OF POSSESSION ...................................................................................................... 331
5. LOSS OR UNLAWFUL DEPRIVATION OF A MOVABLE ........................................................... 335
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E. USUFRUCT ......................................................................................................................... 336

2. CLASSIFICATION .................................................................................................................... 337
3. RIGHTS AND OBLIGATIONS OF USUFRUCTUARY .................................................................. 339
4. RIGHTS OF THE OWNER........................................................................................................ 341
5. EXTINCTION, TERMINATION, AND EXTINGUISHMENT ......................................................... 341
F. EASEMENTS ....................................................................................................................... 342
2. CLASSIFICATION .................................................................................................................... 343
3. MODES OF ACQUIRING EASEMENTS .................................................................................... 344
4. RIGHTS AND OBLIGATIONS OF THE OWNERS OF THE DOMINANT AND SERVIENT ESTATES
345
5. MODES OF EXTINGUISHMENT.............................................................................................. 346
6. LEGAL VS. VOLUNTARY EASEMENT ...................................................................................... 346
7. KINDS OF LEGAL EASEMENTS ............................................................................................... 346
A. RELATING TO WATERS ............................................................................................... 346
B. RIGHT OF WAY ........................................................................................................... 347
C. LIGHT AND VIEW ........................................................................................................ 348
G. NUISANCE ......................................................................................................................... 348
1. NUISANCE PER SE ................................................................................................................. 349
2. NUISANCE PER ACCIDENS ..................................................................................................... 349
3. LIABILITIES ............................................................................................................................ 349
4. NO PRESCRIPTION ................................................................................................................ 349
5. REMEDIES AGAINST A PUBLIC NUISANCE ............................................................................ 349
6. REMEDIES AGAINST A PRIVATE NUISANCE .......................................................................... 350
7. CRIMINAL PROSECUTION ..................................................................................................... 350
8. JUDGMENT WITH ABATEMENT ............................................................................................ 350
9. EXTRAJUDICIAL ABATEMENT................................................................................................ 350
10.SPECIAL INJURY TO INDIVIDUAL ........................................................................................... 351
11.RIGHT OF INDIVIDUAL TO ABATE A PUBLIC NUISANCE ........................................................ 351
12.RIGHT TO DAMAGES ............................................................................................................. 351
13.DEFENSES TO ACTION........................................................................................................... 351
14.WHO MAY SUE ON PRIVATE NUISANCE ............................................................................... 351
H. MODES OF ACQUIRING OWNERSHIP ................................................................................. 351
1. OCCUPATION ........................................................................................................................ 351
2. DONATIONS .......................................................................................................................... 352
A. NATURE ...................................................................................................................... 352
B. PERSONS WHO MAY GIVE OR RECEIVE ...................................................................... 354
C. EFFECTS AND LIMITATIONS OF DONATIONS ............................................................. 355
D. REVOCATION AND REDUCTION OF DONATION ......................................................... 356
3. PRESCRIPTION ...................................................................................................................... 359
A. GENERAL PROVISIONS................................................................................................ 359
B. PRESCRIPTION OF OWNERSHIP AND OTHER REAL RIGHTS ....................................... 359
C. PRESCRIPTION OF ACTIONS ....................................................................................... 362
I. QUIETING OF TITLE ............................................................................................................ 365
1. REQUISITES ........................................................................................................................... 365
2. DISTINCTIONS BETWEEN QUIETING TITLE AND REMOVING/PREVENTING CLOUD ............. 366
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3. PRESCRIPTION/NON-PRESCRIPTION OF ACTION ................................................................. 366

J. ACTIONS TO RECOVER PROPERTY ...................................................................................... 367
1. ACCION INTERDICTAL OR EJECTMENT SUIT ......................................................................... 367
2. ACCION PUBLICIANA ............................................................................................................ 368
3. ACCION REIVINDICATORIA ................................................................................................... 368
II. CREDIT TRANSACTIONS............................................................................................................. 373
A. PERSONAL PROPERTY SECURITIES (R.A. 11507).................................................................. 373

B. REAL ESTATE MORTGAGE .................................................................................................. 383
III. LAND TITLES & DEEDS ............................................................................................................... 393
A. TORRENS SYSTEM; GENERAL PRINCIPLES ........................................................................... 393

B. REGALIAN DOCTRINE ......................................................................................................... 396
C. ORIGINAL REGISTRATION .................................................................................................. 397
1. ORDINARY REGISTRATION .................................................................................................... 398
A. WHO MAY APPLY ....................................................................................................... 408
B. DECREE OF REGISTRATION ......................................................................................... 409
C. REVIEW OF DECREE OF REGISTRATION; INNOCENT PURCHASER FOR VALUE........... 410
D. CERTIFICATE OF TITLE ........................................................................................................ 411
E. SUBSEQUENT REGISTRATION ............................................................................................ 415
1. VOLUNTARY DEALINGS ......................................................................................................... 418
2. INVOLUNTARY DEALINGS ..................................................................................................... 421
A. ADVERSE CLAIM ......................................................................................................... 421
B. NOTICE OF LIS PENDENS ............................................................................................ 423
F. NON-REGISTRABLE PROPERTIES ........................................................................................ 426
G. DEALINGS WITH UNREGISTERED LANDS ............................................................................ 427
H. ASSURANCE FUND ............................................................................................................. 428
1. ACTION OF COMPENSATION FROM FUNDS ......................................................................... 429
2. LIMITATION OF ACTION........................................................................................................ 429
I. CADASTRAL SYSTEM OF REGISTRATION (ACT NO. 2259, AS AMENDED) ............................. 430
J. REGISTRATION THROUGH ADMINISTRATIVE PROCEEDINGS (C.A. 141, AS AMENDED) ....... 433
K. RECONSTITUTION OF TITLES .............................................................................................. 439
IV. PRACTICAL EXERCISES ............................................................................................................... 450
A. DEMAND AND AUTHORIZATION LETTERS .......................................................................... 450

1. DEMAND LETTERS ................................................................................................................ 450
A. RELEVANT PROVISIONS .............................................................................................. 450
B. FORM: DEMAND LETTER ............................................................................................ 451
2. AUTHORIZATION LETTER ...................................................................................................... 452
A. DEFINITION ................................................................................................................. 452
B. FORM: AUTHORIZATION LETTER ................................................................................ 452
B. SIMPLE CONTRACTS .......................................................................................................... 453
1. LEASE AND SALE ................................................................................................................... 453
A. SPECIAL RULES FOR TRANSACTIONS INVOLVING REAL PROPERTY ............................ 453
B. FORM: CONTRACT OF SALE AND LEASE ..................................................................... 454
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C. FORM: DEED OF SALE OF REGISTERED REAL PROPERTY ............................................ 455

D. FORM: DEED OF SALE OF PERSONAL PROPERTY (MOTOR VEHICLE) ......................... 457
E. SPECIAL RULES FOR SALE OF PERSONAL PROPERTY .................................................. 458
F. FORM: CONTRACT OF LEASE ...................................................................................... 459
G. SPECIAL RULES FOR CONTRACT OF LEASE: ................................................................ 460
C. COMPLAINT ....................................................................................................................... 460
1. DEFINITION ........................................................................................................................... 460
2. FORM: COMPLAINT .............................................................................................................. 460
D. JUDICIAL AFFIDAVIT .......................................................................................................... 462
1. DEFINITION ........................................................................................................................... 462
2. FORM: JUDICIAL AFFIDAVIT .................................................................................................. 462
E. SPECIAL POWER OF ATTORNEY .......................................................................................... 464
F. SUBSCRIPTION AGREEMENT .............................................................................................. 465
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PART I: CIVIL LAW I

A. EFFECT AND APPLICATION OF LAWS
I. PRELIMINARY TITLE 1. WHEN LAW TAKES EFFECT
TOPIC OUTLINE UNDER THE SYLLABUS GENERAL RULE: Laws shall take effect after
fifteen days following the completion of their
publication either in the Official Gazette or in a
A. EFFECT AND APPLICATION OF newspaper of general circulation in the
LAWS Philippines, unless it is otherwise provided. (Article
1. When Law Takes Effect 2, New Civil Code as amended by E.O. No. 200)
2. Retroactivity of Laws
3. Mandatory or Prohibitory Laws NOTE: The phrase “unless it is otherwise
4. Waiver of Rights provided” as written in Article 2 of the New Civil
5. Repeal of Laws Code refers to the 15-day period before which a
6. Judicial Decisions law takes effect and not to provision in the same
7. Doubtful Statutes article requiring publication. (Tañada v, Tuvera,
8. Customs G.R. No. L-63915, 1986)
9. Rule on Periods
10. Conflict of Laws (Under the Civil NOTES REGARDING PUBLICATION
Code) 1. Publication is mandatory.
B. HUMAN RELATIONS 2. Publication must be in full. Otherwise, it
is no publication at all. (Ibid.)
3. The purpose of publication is to inform
the public of its contents. (Ibid.)
4. It applies to all statutes, including local
and private laws, unless there are
special laws providing for a different
mechanism for the effectivity of specific
statutes. (Ibid.)
EFFECT OF NON-PUBLICATION:
1. If there is a lack of/absence of full
compliance with the publication
requirement, it will render the law
ineffective (Nagkakaisang Maralita ng
Sitio Masigasig, Inc. v. Military Shrince
Services, G.R. No. 187587)
2. If there is lack of/absence of full

compliance with the publication
requirement, a citizen may be excused
from his non-compliance with the law if it
was done due to ignorance.
- The publication requirement as
provided in Article 2 of the New Civil
Code is the legal basis for which the
implementation of Article 3 of the
New Civil Code, which provides that
Ignorance of the Law excuses no
one from compliance therewith, is
justified.
WHEN IS PUBLICATION NOT REQUIRED

1. Interpretative regulations and other
internal regulations which regulate only
the personnel of an administrative
agency and not the public.
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2. Letters of Instruction issued by the 7. When the law is penal in nature and is
administrative superiors concerning rules favorable to the accused, but the
or guidelines to be followed by their accused is a habitual delinquent.
subordinates in the performance of their
duties. NOTE REGARDING RETROACTIVITY OF
PENAL LAWS: An accused is deemed to be a
EXCEPTION: When the law explicitly provides for habitual delinquent if, within 10 years from his or
its date of effectivity. her release or final conviction for the same crimes,
he was found guilty any of the following crimes for
NOTES REGARDING THE EXCEPTION: the third time or as an oftener: serious or less
1. If the law provides for a different period, serious physical injuries, robo, hurto, estafa or
regardless of the fact that the period falsification.
provided is shorter or longer than the 15-
day period as written in Article 2 of the 3. MANDATORY OR PROHIBITORY
New Civil Code, that period will prevail. LAWS
2. If the law explicitly provides that it shall General Rule: Acts executed against the
take effect immediately, it means that the
provisions of mandatory or prohibitory laws shall
law will take effect immediately after
compliance with the publication be void. (Art. 5)
requirement.
Exception: If the law expressly provides for the
2. RETROACTIVITY OF LAWS validity of acts committed in violation of a
mandatory or prohibitory provision of a statute.
GENERAL RULE: Laws shall have no retroactive
effect, unless the contrary is provided (Article 4,
New Civil Code)
4. WAIVER OF RIGHTS
EXCEPTIONS: Right - A legally enforceable claim of one person

1. When the law is penal in nature and is against another, that the other shall do a given act,
favorable to the accused, who is not a or shall not do a given act.
habitual criminal/delinquent (Article 22,
Revised Penal Code) Kinds of rights
2. When the law expressly provides for
a. Natural Rights – Those which grow out of the
retroactivity
3. When the law is interpretative nature of man and depend upon personality.
4. When the law is curative Example: right to life, liberty, privacy, and
5. When the law is remedial good reputation.
6. When the law is procedural b. Political Rights – Consist in the power to
7. Emergency Laws participate, directly or indirectly, in the
8. When the law is penal in character and is establishment or administration of
favorable to the accused
government. Example: right of suffrage, right
EXCEPTION TO THE EXCEPTIONS: to hold public office, right of petition.
1. Ex post facto laws c. Civil Rights– Those that pertain to a person
2. Bills of Attainder by virtue of his citizenship in a state or
3. When to give retroactive effect will impair community. Example: property rights,
the obligation of contracts marriage, equal protection of laws, freedom of
4. When to give retroactive effect will affect contract, trial by jury.
injuriously vested rights
5. When to give retroactive effect to a 1. Real rights – enforceable against the
change in a substantive law will whole world (absolute rights)
prejudice a party that has followed the 2. Personal rights – enforceable against a
earlier law or judicial doctrine (People v. particular individual (relative rights)
Licera, L-39990)
6. When there is doubt as to whether the Waiver – intentional relinquishment of a known
legislature intended the law to have
right. (Castro v. Del Rosario, G.R. No. L-17915)
retroactive effect.
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Waivers are not presumed but must be clearly and

convincingly shown either by express stipulation Example: Law A is expressly repealed by
or acts admitting no other reasonable explanation Law B. If Law B is itself repealed by Law C, is
Law A revived?
(Arrieta v. National Rice and Corn Corporation,
G.R. No. L-15645) No, unless Law C expressly so provides.
General Rule: Rights may be waived. (Art. 6) 2. When a law which impliedly repeals a prior law
is itself repealed, the prior law shall be revived
Requisites of a valid waiver: (Herrera v. unless the language of the repealing statute
Borromeo, G.R. No. L-41171) provides otherwise (U.S. v. Soliman, G.R. No.
L-11555).
1. Existence of a right
2. Knowledge of the existence of such right Example: Law A is impliedly repealed by Law
3. An intention to relinquish the right B. Law B is later repealed by Law C. Is Law A
revived?
Exceptions: When waiver is
i. Contrary to law, public order, public policy, Yes, unless Law C provides otherwise.
morals, good customs (e.g. waiver of future
inheritance, political rights, future support)
6. JUDICIAL DECISIONS
ii. Prejudicial to a third person with a right STARE DECISIS
recognized by law.
Effect of Judicial Decisions
5. REPEAL OF LAWS Judicial decisions applying or interpreting the laws
or the Constitution shall form part of the legal
Repeal system of the Philippines (Art. 8).
It is the legislative act of abrogating through a
subsequent law the effects of a previous statute or Only decisions of the Supreme Court establish
portions thereof (STA. MARIA, PERSONS AND FAMILY jurisprudence or doctrines in this jurisdiction (Vda.
RELATIONS LAW (2019), p. 11.). De Miranda v Imperial, G.R. No. L-49090).
TYPES OF REPEAL When Judicial Decisions Deemed Part of the

Law. The application and interpretation by the
Express Repeal Supreme Court are part of the law as of the date
An express repeal is one which is literally declared of the law’s enactment (People v. Licera, G.R. No.
by a new law, either in specific terms, where L-39990).
particular laws and provisions are named, or in
general terms (Ibid.). BUT: When a doctrine of the Supreme Court is
overruled and a different view is adopted, the new
Implied Repeal doctrine will be applied prospectively and will not
An implied repeal is one which takes place when be applied to parties who had relied on the old
a new law contains provisions contrary to or doctrine and acted on the faith thereof (People v.
inconsistent with those of a former without Jabinal,G.R. No. L-30061).
expressly repealing them (Ibid.).
How Judicial Decisions May Be Abrogated
Requisites of an Implied Repeal 1) By contrary ruling of the Supreme Court itself;
1. The laws cover the same subject matter; and and
2. The latter law is repugnant to the earlier law 2) By corrective legislative acts of Congress,
(Agujetas v. CA, G.R. No. 106560). although said laws cannot adversely affect
those favored prior to the Supreme Court
Effect if the Repealing Law is Itself Repealed decisions (1 PARAS, supra at 69).
1. When a law which expressly repeals a prior
law is itself repealed, the law first repealed
shall not be revived, unless expressly so
provided (1 PARAS, Civil Code of the
Philippines Annotated (2016), p. 49
[hereinafter 1 PARAS].).
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DUTY OF JUDGES Note: Art. 13 has been impliedly

repealed by E.O. 292 or the
Duty of a Judge if the Law is Silent Revised Administrative Code of
No judge or court shall decline to render judgment 1987.
by reason of the silence, obscurity, or insufficiency Month 30 days, unless the month is
of the laws (Art. 9). identified, in which case it shall
be computed according to the
Judicial Legislation number of days the specific
The judiciary is tasked with resolving legal month contains (Art. 13).
controversies and interpreting statutes; it cannot Day 24 hours
legislate.
BUT: Even a legislator, through Art. 9, recognizes Night Sunset to sunrise

that in some instances, courts “do and must
legislate” to fill in the gaps in the law, because the
mind of the legislator is finite and therefore cannot Week Count 7 days as indicated, not
envisage all possible causes to which the law may necessarily Saturday to Sunday
apply (STA. MARIA, supra at 17).
To count the period, the first day is excluded and
7. DOUBTFUL STATUTES the last day is included (Art. 13).
Rule in Case of Doubt Example: If a law states that a statute takes effect
In case of doubt in the interpretation or application on the 20th day from its publication and such
of laws, it is presumed that the lawmaking body publication was made on Feb. 3, 1988, then the
intended right and justice to prevail (Art. 10). law shall be effective on Feb. 23, 1988.
When Applicable The first day, which is Feb. 3, 1988, is excluded

Where the law is clear, it must be applied while the last day, which is Feb. 23, 1998, is
according to its unambiguous provisions. (Acting included.
Commissioner of Customs v. Manila Electric
Company, G.R. No. L-23623). Construction and 10. CONFLICT OF LAWS (Under the
interpretation come only after it has been
Civil Code)
demonstrated that application is impossible or
inadequate without them (Republic Flour Mills, Inc.
Penal Laws
v. Commissioner of Customs, G.R. No. L-28463).
Territoriality Principle: Penal laws and laws of
public security and safety shall be obligatory upon
8. CUSTOMS all who live or sojourn in the Philippine territory
(Art. 14.).
Custom
A custom is a rule of conduct formed by repetition Exceptions:
of acts, uniformly observed (practiced) as a social 1) Principles of Public International Law
rule, legally binding, and obligatory.
Example: Immunities granted to diplomatic
Rules officials and visiting heads of state.
1) Customs which are contrary to law public
order or public policy shall not be 2) Treaty stipulations
countenanced (Art. 11).
2) Customs must be proved as a fact according Example: Philippine-United States Military
to the rules of evidence (Art. 12). Bases Agreement (dated March 14, 1947),
which contains provisions exempting certain
9. RULE ON PERIODS members of the armed forces of the United
States from the jurisdiction of our courts.
Rule on Periods
Period Rule 3) Laws of Preferential Application
Year Year shall be understood to be
12 calendar months (E.O. 292,
Book I, Sec. 31). Example: Foreign Ambassadors, ministers
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Note: Consuls do not enjoy the privilege of

immunity. Note: The enumeration above is governed by the
national law of the decedent, regardless of place
Laws Relating to Family Rights and Duties of death.
Nationality Principle: Regardless of where a
Philippine citizen may be, he will be governed by Q: A Turkish citizen wrote a last will, which
Philippine laws with respect to – provides that his property should be disposed of
1) Family rights and duties; pursuant to Philippine laws. Is the provision valid?
2) Status;
3) Condition; and A: No, the provision is illegal and void because,
4) Legal capacity of persons (Art. 15.). pursuant to what is now Article 16 of the Civil
Code, the national law of the deceased should
If a Filipino initiates a petition abroad to obtain an govern. Hence, Turkish laws should apply
absolute divorce from his wife or her husband who (Miciano v. Brimo, G.R. No. L-22595).
is also a Filipino and successfully gets a divorce,
the Philippines will not recognize such absolute Laws Relating to Forms and Solemnities
divorce. This is because under Art. 26(2) of the Lex Loci Celebrationis: Forms and solemnities of
Family Code, the only absolute divorce which the contracts, wills, and other public instruments
Philippines may recognize is a mixed marriage (extrinsic validity) shall be governed by the laws of
between a Filipino and a foreigner. the country in which they are executed (Art. 17,
par. 1.).
Hence, in the eyes of Philippine law, they are still
married, and therefore should anyone of them Acts Before Diplomatic and Consular Officials:
marry again, he or she can be considered to have Any act or contract made in a foreign country
committed either concubinage or adultery, as the before diplomatic and consular officials must
case may be (See Tenchavez v. Escaño, G.R. No. conform to the solemnities under Philippine law
L-19671). (Art. 17, par. 2.).
Laws Governing Property (Real and Personal) Prohibitive Laws

Lex Situs or Lex Rei Sitae: Real property, as well General Rule: Prohibitive laws concerning
as personal property, is subject to the law of the persons, their acts or property, and those which
country where it is situated (Art. 16, par. 1.). have for their object public order, public policy, or
good customs are not rendered ineffective by laws
Exception: Intestate and testamentary of judgments promulgated or by determinations or
succession, which are regulated by the national conventions agreed upon in a foreign country (Art.
laws of the deceased regardless of the nature of 17, par. 3.).
the property; in particular, this rule applies to the
following: (CIAO) Exception: Art. 26, par. 2 of the Family Code (e.g.
Divorce)
1) Capacity to succeed (Art. 1039.);
2) Intrinsic validity of testamentary provisions;
3) Amount of successional rights; and
4) Order of succession.
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SUMMARY OF PROVISIONS ON CONFLICTS OF LAW
LAW MATTERS/ GOVERNING PRINCIPLE/ DOCTRINE

PERSONS BOUND
Penal Laws All those who live or sojourn Principle of Territoriality: Law of the place where crime
in Philippine territory was committed (Art. 14).
Exceptions:
1) Principles of Public International Law
2) Treaty Stipulations
Laws Relating to Citizens of the Philippines, Principle of Nationality: National law of the person, with
Family Rights and including those living respect to –
Duties abroad 1) Family rights and duties;
2) Status;
3) Condition; and
4) Legal capacity (Art. 15).
Laws Governing Real and personal property Lex situs or Lex rei sitae: Law of the place where the
Property (Real and property is situated (Art. 16)
Personal)
Exception: Intestate and testamentary succession, in
particular:
1) Capacity to succeed (CIVIL CODE, Art. 1039.);

2) Intrinsic validity of testamentary provisions;
3) Amount of successional rights; and
4) Order of succession.
Note: The enumeration is governed by the national law of

the decedent, regardless of place of death.
Laws Relating to Forms and solemnities of Lex loci celebrationis: Law of the country in which they
Forms and contracts, wills, public are executed (Art. 17)
Solemnities instruments
Exception: If executed before Philippine diplomatic or
consular officials abroad, Philippine laws shall govern.
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B. HUMAN RELATIONS Exception: When one party has already made

real efforts to prepare and spend for the wedding.
Principle of Abuse of Rights (Art. 19) Such act is unjustifiably contrary to good customs
Every person must, in the exercise of his rights for which the defendant must be held answerable
and in the performance of his duties, act with for damages in accordance with Art. 21 of the
justice, give everyone his due, and observe NCC. (Wassmer v. Velez, G.R. No. L-20089,
honesty and good faith. 1964)
Requisites/Elements: Unjust Enrichment / Accion in rem verso (Art.

1. There is a legal right or duty 22)
2. Which is exercised in bad faith Every person who through an act or performance
3. For the sole intent of prejudicing or injuring by another, or any other means, acquires or
another. (Sps. Andrada v. Pilhino Sales comes into possession of something at the
Corporation, G.R. No. 156448, 2011) expense of the latter without just or legal ground,
shall return the same to him.
Standards to Observe in the Exercise of One’s
Rights or Performance of Duty: Conditions for Unjust Enrichment to Arise
1. Act with justice First, a person must have been benefited without
2. Give everyone his due a real or valid basis or justification. Second, the
3. Observe honesty and good faith benefit was derived at another person’s expense
or damage (Art. 22 and Loria v. Muñoz, G.R.
Acts Contrary to Law (Art. 20) 187240, 2014).
Every person who, contrary to law, willfully or
negligently causes damage to another, shall Requisites (EWLN)
indemnify the latter for the same. 1. Defendant had been Enriched;
2. Plaintiff suffered a Loss;
Acts Contra Bonos Mores (Art. 21) 3. Unjust enrichment of defendant is Without just
Any person who willfully causes loss or injury to or legal ground; and
another in a manner that is contrary to morals, 4. Plaintiff has No other action based on
good customs or public policy shall compensate contract, quasi-contract, crime, or quasi-
the latter for the damage.
delict.
Elements:
Note: Mistake is an essential element in solutio
1. There is an act which is legal;
indebiti but not in accion in rem verso.
2. But contrary to morals, good customs, public
order, or public policy; and
Duty to Indemnify One for Damage to Property
3. It is done with intent to injure
Even when an act or event causing damage to
another’s property was not due to the fault or
Note:
negligence of the defendant, the latter shall be
• Similarities: In Arts. 19-21, at the core is bad
liable for indemnity if through the act or event he
faith or malice and the aggrieved party must
was benefited.
be indemnified.
(Art. 23)
• Differences: Under Arts. 19 & 21, the act
must be done intentionally. Art. 20, however, Duty of Courts to Protect a Party in a Contract
does not distinguish (the act may be done When such party is at a disadvantage on account
either willfully or negligently, as long as the act of his: (MIgIMenTO)
is be contrary to law). (a) Moral dependence
(b) Ignorance
Actions for Breach of Promise to Marry
(c) Indigence
General Rule: Breach of promise to marry is not
(d) Mental weakness
actionable.
(e) Tender age
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(f) Other handicap (Art. 24) inexcusable negligence (Philippine Match Co.,
Ltd. v. City of Cebu, G.R. No. L-30745).
Thoughtless Extravagance (Art. 25)
May be stopped by order of courts if the following Violation of Civil and Political Rights (Art. 32)
requisites are present: An individual can hold a public officer or a private
1. During an acute public want or emergency; individual personally liable for damages on
and account of an act or omission that violates a
2. Person seeking to stop it is the government or constitutional right only if it results in a particular
a private charitable institution. injury to the former. (See Vinzons-Chato v.
Fortune Tobacco Corp, G.R. No. 141309).
Rights to Personal Dignity and Privacy (Art. 26)
Every person shall respect the dignity, personality, Note: Good faith is not a defense. To be liable
privacy and peace of mind of others. under Art. 32, it is enough that the plaintiffs’
constitutional rights were violated. It is not required
The following acts produce a cause of action for that the defendants acted with malice or bad faith.
damages, prevention and other relief: (PMIV) The object of Art. 32 is to put an end to abuses
i. Prying into the privacy of another’s which are justified by a plea of good faith (Lim v.
residence Ponce de Leon, G.R. No. L-22554).
Note: It includes "any act of intrusion into, Members of Municipal or City Police Force (Art.
peeping or peering inquisitively into the 34)
residence of another without the consent 1) Primary liability is assessed against a member
of the latter." It may extend to places of the municipal or city police force who
where he has the right to exclude the refuses or fails to render aid or protection.
public or deny them access. It covers 2) Subsidiary liability is imposed on the city or
places, locations, or even situations municipality concerned in case of insolvency.
which an individual considers as private
such as a business office located within Unfair Competition through Unjust,
his residence. (Spouses Hing v. Oppressive, or Highhanded Methods (Art. 28)
Choachuy, Sr., G.R. No. 179736, 2013). Unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of
ii. Meddling with or disturbing the private life force, intimidation, deceit, machination or any
or family relations of another other unjust, oppressive or highhanded method
iii. Intriguing to cause another to be shall give rise to a right of action by the person who
alienated from friends thereby suffers damage.
iv. Vexing or humiliating another on account
of his religious beliefs, lowly station in life, Article 28 does not prohibit competition with regard
place of birth, physical defect, or other to enterprises. What it seeks to be prevented is not
personal condition competition per se but the use of unjust,
oppressive or highhanded methods which may
Relief Against Public Officials (Art. 27) deprive others of a fair chance to engage in
Any person suffering material or moral loss business or earn a living (Willaware Products
because a public servant or employee refuses or Corp. v. Jesichris Manufacturing Corp., G.R. No.
neglects, without just cause, to perform his official 195549, 2014).
duty may file an action for damages and other
relief against the latter, without prejudice to any Civil Action After Acquittal in Criminal Case
disciplinary administrative action that may be (Art. 29)
taken. When the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been
Article 27 presupposes that the refusal or omission proved beyond reasonable doubt, a civil action for
of a public official is attributable to malice or
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damages for the same act or omission may be damages may be instituted by the injured party
instituted. which shall proceed independently of the criminal
action.
Example: A was accused of theft, but he was
acquitted because his guilt had not been proved Required Quantum of Evidence:
beyond reasonable doubt. B, the offended party, Preponderance of Evidence.
can institute the civil action for damages for the
same act and this time, mere preponderance of Rationale: To allow a citizen to enforce his rights
evidence is sufficient. in a private action brough by him, regardless if
there is action or inaction on the part of the
Civil Liability Arising from an Unprosecuted prosecutor. It promotes self-reliance on the part of
Criminal Offense (Art. 30) citizens for the proper vindication of their private
Even if the civil obligation arose from a criminal rights, rather than merely relying on the
offense, the required quantum of evidence is not government for the enforcement and protection of
proof beyond reasonable doubt but merely the same. (Records of the Civil Code Commission)
preponderance of evidence.
Construction: The terms ‘fraud’, ‘defamation’,
Example: A accused B of stealing his (A’s) watch, and ‘physical injuries’ must be understood in their
and so he (A) brought a civil action against B to ordinary sense. Thus, ‘fraud’ includes estafa,
get the watch and damages. If the fiscal institutes ‘defamation’ includes libel, and ‘physical injuries’
a criminal proceeding against B the civil case is can include death or homicide (Dyogi v. Yatco,
suspended in the meantime (Rule 111, Rules of G.R. No. L-9623), but not reckless imprudence
Court), this case not being one of those for which resulting in homicide (Marcia v. Court of Appeals,
there can be an independent civil action. But if the G.R. No. L-34529).
fiscal does not, then the civil case continues, and
here, a mere preponderance of evidence would be Reservation of Civil Actions (Art. 35)
sufficient to enable A to recover. In cases wherein the justice of peace determines
that there are no reasonable grounds to believe
Civil Obligation Not Arising From Felony. (Art. that a crime has been committed or in cases when
31) the prosecuting attorney refuses or fails to institute
Article 31 was enacted to provide an aggrieved criminal proceedings, the injured party may file a
party a remedy and cause of action in situations civil action for damages.
wherein they sustained an injury which was not
necessarily a result of a commission of a crime. If an information is filed by the prosecuting
attorney after the injured party has initiated the civil
Example: Quasi-Delicts (Culpa Aquiliana) as action, the civil action shall be suspended until the
provided under Article 2176 of the Civil Code of the termination of the criminal action.
Philippines and Culpa Contractual.
When applicable: When a person claims to be
Note: Article 31 of the Civil Code does not provide injured by a felony for which no independent icvil
for an independent civil action, as compared to action is granted in accordance with the Civil Code
Article 32, 33 and 34 of the same code. Further, it or any other special law.
does not refer to a civil action based on the
commission of a felony but refers to one based on Required Quantum of Evidence:
an obligation arising from another source, such as Preponderance of Evidence.
one arising from law or from a contract.
Prejudicial Questions (Art. 36)
Civil Action Arising from Defamation, Fraud A prejudicial question is one that arises in a case,
and Physical Injuries (Art. 33) the resolution of which is a logical antecedent of
In cases of Defamation, Fraud and Physical the issue involved therein, and the cognizance of
Injuries, a separate and distinct civil action for
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which pertains to another tribunal (Zapanta v. case must be first resolved before the criminal
Montesa, G.R. No. L-14534). case could proceed.
In prejudicial question circumstances, there 2. When the law provides that both civil and
always two cases involved: a criminal and a civil criminal case can be instituted and may proceed
one. simultaneously. (Example: Art. 33)
Two Essential Elements of a Prejudicial Note: The existence of a civil suit for annulment of
Question: (Sec. 5, Rule 111, Rules of Court) marriage does not constitute as to pose a
1. The civil action always involves an issue similar prejudicial question to warrant suspension of a
or intimately related to the issue raised in the civil criminal case for bigamy because prior to
action and judgement granting the petition for annulment, the
2. The resolution of such issue determines marriage is presumed to be validly existing. Same
whether or not the criminal action may proceed. rule applies for a civil suit for the declaration of
nullity of marriage on the ground of psychological
Rules Regarding Precedence of Actions incapacity, except for purpose of remarriage under
(Benitez v. Concepcion, G.R. No. L-14646) Article 40 of the Family Code. (Ibid.)
General Rule: Where both a civil and a criminal

case arising from the same facts are filed, the ————- end of topic ————-
criminal case takes precedence.
Exceptions:
1. If there exists a prejudicial question. In such
case, the prejudicial question as raised in the civil
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II. PERSONS AND FAMILY d. Instances and effects of rescission

2. Inter-country adoption (R.A. No. 8043)
RELATIONS a. When allowed
b. Who may adopt
TOPIC OUTLINE UNDER THE SYLLABUS c. Who may be adopted
A. PERSONS I. SUPPORT
1. Civil Personality
2. Use of surnames J. PARENTAL AUTHORITY
3. Entries in the Civil Registry and Clerical
Error Law (R.A. No. 9048, as amended) K. EMANCIPATION
4. Absence
a. Civil Code provisions L. RETROACTIVITY OF FAMILY CODE
b. Presumptive death of absent spouse
under the Family Code
B. MARRIAGE
1. Requisites of marriage
2. Exemption from license requirement
3. Marriages solemnized abroad and
foreign divorce
4. Void and voidable marriages
a. Annulment under Article 36 (as
recently articulated in Tan-Andal v.
Andal, G.R. No. 196359, May 11,
202; Totality of Evidence Rule)
C. LEGAL SEPARATION
D. RIGHTS AND OBLIGATIONS

BETWEEN HUSBAND AND WIFE
E. PROPERTY RELATIONS BETWEEN

HUSBAND AND WIFE
1. General provisions
2. Donations by reason of marriage
3. Absolute Community of Property
4. Conjugal Partnership of Gains
5. Separation of property and
administration of common property by
one spouse during the marriage
6. Regime of separation of property
7. Property regime of unions without
marriage
F. FAMILY HOME
G. PATERNITY AND FILIATION

1. Legitimate children
2. Proof of filiation
3. Illegitimate children
4. Legitimated children
H. ADOPTION
1. Domestic Adoption (R.A. No. 8552)
a. Who may adopt
b. Who may be adopted
c. Rights of an adopted child
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A. PERSONS If nothing has been specified on this point, the

property and other assets shall be applied to
1. CIVIL PERSONALITY (ART. 44-47, similar purposes for the benefit of the region,
NCC) province, city or municipality which during the
existence of the institution derived the principal
benefits from the same.
a. The State and its political subdivisions
b. Other corporations, institutions, and
Restrictions on Capacity to Act (MInD-ICIP)
entities for public interest or purpose
a. Minority
created by law
b. Insanity
c. Corporations, partnerships, and
c. State of being Deaf-mute
associations for private interest or
d. Imbecility
purpose to which the law grants a juridical
e. Civil Interdiction
personality
f. Prodigality - state of squandering money
or property with a morbid desire to
Laws Governing Juridical Persons (Art. 45)
prejudice the heirs of a person (Martinez v.
a. The State, its political subdivisions,
Martinez, G.R. No. 445, 1902)
and corporations, institutions, and
entities for public interest or purpose:
NOTE: But these do not exempt the incapacitated
governed by the laws creating or
person from certain obligations
recognizing them.
b. Private corporations: governed by the
Circumstances that Modify or Limit Capacity to
Revised Corp. Code (R.A. 11232)
Act (FAT-DA-PAPIII)
c. Partnerships and associations:
a. Family relations
governed by the provisions of the New
b. Alienage
Civil Code on partnerships, except those
c. Trusteeship
registered with the SEC which should be
d. State of being Deaf-mute
governed like corporations
e. Age
f. Penalty
Extinguishment
g. Absence
By termination of existence either through law,
h. Prodigality
dissolution, or expiration of corporate life
i. Insanity
j. Insolvency
Rights of a Juridical Person (Art. 46)
k. Imbecility (Art. 39)
a. Acquire and possess property of all kinds
b. Incur obligations
DOMICILE AND RESIDENCE OF PERSONS
c. Bring civil or criminal actions
Place of Domicile (Art. 50-51)
JURIDICAL CAPACITY CAPACITY TO ACT
• For natural persons, it is the place of
Fitness to be Power to do acts with
habitual residence
the subject of legal effect
legal relations) • For juridical persons
o General rule: In accordance
Passive Active with the law creating or
recognizing them, or any other
Inherent Not Inherent; attained provision
or conferred o Exception: If the law is silent,
Lost only through Lost through death the residence shall understood
death and other causes to be the place where their legal
Can exist without Cannot exist without representation is established or
capacity to act juridical capacity where they exercise their
Cannot be limited or Can be restricted, principal functions
restricted modified, or limited
NOTE: A person may have as many residences as
Upon the dissolution of coporations, he wants, but he can only have one domicile.
institutions, and other entities for public Under the Family Code, the husband and wife
interest or purpose (Art. 47): shall fix the family domicile. In case of
their property and other assets shall be disposed disagreement, the Court shall decide (Art. 69)
of in pursuance of law or the charter creating them.
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A minor follows the domicile of his parent However, she may choose to continue
• Domicile of origin can only be lost when a employing her former husband’s surname,
change of domicile occurs unless:
• If the child is illegitimate, the domicile of
the mother is followed i. The court decrees otherwise
ii. She or the former husband is
Requirements for the Acquisition of New married again to another person.
Domicile
1. Bodily presence in new locality; g. When legal separation has been granted,
2. Intention to remain therein (animus the wife shall continue using her name and
manendi); and surname before the legal separation
3. Intention to abandon the old domicile h. A widow may use the deceased
(animus non revertendi) husband’s surname as though he were still
living.
Kinds of Domicile i. In case of identity of names and surnames,
a. Domicile of Origin: received by a the younger person shall be obliged to use
person at birth such additional name or surname as will
b. Domicile of choice: the place freely avoid confusion.
chosen by a person sui juris j. In case of identity of names and surnames
between ascendants and descendants,
2. USE OF SURNAMES the word “Junior” can be used only by a
son. Grandsons and other direct male
descendants shall either:
a. Legitimate and legitimated children shall
1. Add a middle name or the mother’s
principally use the surname of the father.
surname, or
b. An adopted child shall bear the surname of
2. Add the Roman Numerals II, III, and
the adopter.
so on.
c. Illegitimate children shall bear the
surname of the mother
3. ENTRIES IN THE CIVIL REGISTRY
HOWEVER: Illegitimate children may use AND CLERICAL ERROR LAW
the surname of their father if their filiation (R.A. 9048, AS AMENDED)
has been expressly recognized by the
father: What can be corrected under R.A. 9048
i. Through the record of birth Only clerical or typographical errors and change of
appearing in the civil register; OR first name or nickname which can be corrected or
ii. When an admission in a public changed by the concerned city or municipal civil
document or private handwritten registrar or consul general
instrument is made by the father
(RA 9225, amending Art. 176 of Who May File the Petition and Where.
the Family Code) a. Any person having direct and personal
interest in the correction of a clerical or
d. Children conceived before the decree typographical error in an entry and/or
annulling a voidable marriage shall change of first name or nickname in the
principally use the surname of the father. civil register may file, in person, a verified
e. A married woman may use petition with the local civil registry office of
1. Her maiden first name and surname the city or municipality where the record
and add her husband’s surname, or being sought to be corrected or changed
2. Her maiden first name and her is kept.
husband’s surname or b. Citizens of the Philippines who are
3. Her husband’s full name, but presently residing or domiciled in foreign
prefixing a word indicating that she countries may file their petition, in person,
is his wife, such as “Mrs.” with the nearest Philippine Consulates.
f. In case of annulment of marriage, and the
wife is the guilty party, she shall resume Grounds for Change of First Name or
her maiden name and surname. Nickname
a. The petitioner finds the first name or
If she is the innocent spouse, she may nickname to be ridiculous, tainted with
resume her maiden name and surname.
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dishonor or extremely difficult to write or Who is the preferred representative?

pronounce. The spouse present shall be preferred when there
b. The new first name or nickname has been is no legal separation.
habitually and continuously used by the
petitioner and he has been publicly known If the absentee left no spouse, any competent
by that by that first name or nickname in person may be appointed by the court. (Art. 383,
the community: or NCC)
c. The change will avoid confusion.
When absence may be declared
Form and Contents of the Petition. 1. Two (2) years having elapsed without any
Form: The petition shall be in the form of an news about the absentee, or since the receipt
affidavit, subscribed and sworn to before any of the last news, and
person authorized by the law to administer oaths. 2. Five (5) years in case the absentee has left a
person in charge of the administration of his
Contents: property (Art. 384, NCC)
a. The affidavit shall set forth facts necessary
to establish the merits of the petition Who may ask for a declaration of absence
b. It should also show that the petitioner is 1. The spouse present
competent to testify to the matters stated. 2. The heirs instituted in a will, who may present
c. The petitioner shall state the particular an authentic copy of the same;
erroneous entry or entries, which are 3. The relatives who may succeed by the law of
sought to be corrected and/or the change intestacy;
sought to be made. 4. Those who may have over the property of the
absentee some right subordinated to the
Supporting Documents: condition of his death. (Art. 385, NCC)
a. A certified true machine copy of the
certificate or of the page of the registry When will a judicial declaration take effect
book containing the entry or entries Six (6) months after its publication in a newspaper
sought to be corrected or changed. of general circulation. (Art. 386, NCC)
b. At least two (2) public or private
documents showing the correct entry or Alienation and Encumbrance of Property
entries upon which the correction or The wife who is appointed as an administratrix of
change shall be based; and the husband’s property cannot alienate or
c. Other documents which the petitioner or encumber the husband’s property; or that of the
the city or municipal civil registrar or the conjugal partnership, without judicial authority.
consul general may consider relevant and (Art. 388, NCC)
necessary for the approval of the petition.
Administrator of absentee’s property shall be
4. ABSENCE appointed in accordance with Art. 383 (Art.
387).
a. Civil Code Provisions
When will administration cease
What are the provisional measures in case of a. When the absentee appears personally or
absence? by means of an agent;
When a person: b. When the death of the absentee is proved
a. Disappears from his domicile; and his testate or intestate heirs appear;
b. His whereabouts being unknown; and c. When a third person appears, showing by
c. Without leaving an agent to administer his a proper document that he has acquired
property, the absentee’s property by purchase or
other title.
Then: the judge, at the instance of an interested In these cases, the property shall be at the
party, a relative, or a friend, may appoint a person disposal of those who may have a right thereto.
to represent him in all that may be necessary. (Art. 389, NCC)
Same rule applies when under similar

circumstances, the power conferred by the
absentee has expired (Article 381, NCC).
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b. Presumptive death of absent The well-founded belief in the absentee’s death

spouse under the Family Code requires the present spouse to prove that his/her
belief was the result of diligent and reasonable
When a person is presumed dead efforts to locate the absent spouse and that
After an absence of seven years, it being unknown based on these efforts and inquiries, he/she
whether or not the absentee still lives, he shall be believes that under the circumstances, the absent
presumed dead for all purposes, except for those spouse is already dead. Mere claim of diligent
of succession. (Art. 390, NCC) search is insufficient without corroborative
evidence such as testimonies of the persons from
Who are presumed dead whom she inquired (Republic v. Villanueva, G.R.
1. A person on board a vessel lost during a No. 210929, 2015).
sea voyage, or an aeroplane which is
missing, who has not been heard of for It must be shown that sincere honest-to-goodness
four years since the loss of the vessel or efforts had indeed been made to ascertain
airplane; whether the absent spouse is still alive or is
2. A person in the armed forces who has already dead. Even after the non-return of
taken part in war, and has been missing the husband who was a member of the army
for four years; and assigned to Sulu and was thereafter not
3. A person who has been in danger of heard of anymore by the wife for 33 years, there
death under other circumstances and his was still failure on the part of said wife to actively
existence has not been known for four look for her missing husband, and her purported
years. earnest efforts to find him by asking her
husband's parents, relatives, and friends did not
Note: In the cases above, the person is presumed satisfy the strict standard and degree of diligence
dead for all purposes, including the division of the required to create a "well-founded belief' of his
estate among the heirs. (Art. 391, NCC) death. She did not approach the AFP for
information (Republic v. Tampus, G.R. No.
Four Essential Requisites for the Declaration 214243, 2016).
of Presumptive Death (4YRBF)
1. The spouse’s husband or wife has been NOTES:
absent for 4 consecutive Years, or 2 • In this case, the subsequent marriage is
consecutive years if the disappearance valid but it shall be automatically
occurred where there is danger of death terminated by the recording of the
under the circumstances laid down in Art. affidavit of reappearance of the absent
391 of the Civil Code; spouse. (Art. 42)
2. That the present spouse wishes to • Without filing of the affidavit of
Remarry reappearance, there will exist two valid
3. That the present spouse has a well- marriages (valid bigamous marriage).
founded Belief that the absentee is dead; • If both spouses of the subsequent
and marriage acted in bad faith, such
4. That the present spouse Files a summary marriage is void ab initio. (Art. 44)
proceeding for the declaration of
presumptive death of the absentee Effect of Reappearance
[Republic vs Sareñogon, 2016 (citing The subsequent bigamous marriage under Art. 41
Republic v. Cantor, 2013)] remains valid despite reappearance of the
absentee spouse, unless the reappearance made
For a subsequent marriage to be valid, the prior in a sworn statement is recorded in the
marriage must first be dissolved either by the civil registry in the place where the parties to
death of the previous spouse or the final the subsequent marriage resides. In such case,
judicial declaration of nullity or annulment of the the subsequent marriage is automatically
previous marriage obtained before the terminated.
subsequent marriage is entered into, regardless
of the reason for the nullity or defect of the However, if there was a previous judgment
previous marriage, including lack of marriage annulling or declaring the first marriage a nullity,
license (Lasanas v. People, G.R. No. 159031, the subsequent bigamous marriage remains
2014). valid.
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Nullity of judgment of presumptive death is the f. The spouse who contracted the
proper remedy and not an affidavit of subsequent marriage in bad faith shall be
reappearance when the person declared disqualified to Inherit from the innocent
presumptively dead has never been absent. In this spouse by testate or intestate
case, the husband was able to secure a succession
declaration of presumptive death by alleging
fraudulent facts. (Santos v. Santos, G.R. NOTE: The above effects apply to voidable
No. 187061, 2014) bigamous marriages.
Summary proceedings under the Family Code are Except for the first enumerated item (re: legitimate
final and executory pursuant to Article 247. Hence, children), the above effects also apply to
a summary proceeding for the declaration of marriages which are annulled or declared void ab
presumptive death of an absent spouse under initio under Art. 40.
Article 41 of the Family Code is non-
appealable. (Republic v. Tango, G.R. No. B. MARRIAGE
161062, 2009)
Definition of Marriage (Art. 1)
However, a petition for certiorari under Rule 65 1. Special contract;
is still available (Republic v. Sarenogon, Jr., 2. Permanent union;
2016). 3. Between a man and a woman;
4. Entered in accordance with law; and
For the purpose of not only terminating the 5. For the establishment of conjugal and
subsequent marriage but also of nullifying the family life
effects of the declaration of presumptive death and
the subsequent marriage, mere filing of an affidavit 1. REQUISITES OF MARRIAGE
of reappearance would not suffice (Castro v.
Gregorio, G.R. No. 188801, 2014). Essential Requisites of Marriage: (LCI) (Art. 3)
1. Legal capacity of contracting parties;
Effects of Termination of Subsequent a. Must be between a male and
Marriage: (LDBD-RI) (Art. 43, Family Code) female
a. Children of the subsequent marriage b. Must be at least 18 years old
conceived prior to its termination shall be 2. Consent freely given, in the presence of
considered Legitimate, unless the the solemnizing officer; and
marriage is void ab initio due to bad faith 3. Absence of any Impediment
of both spouses of the subsequent
marriage, in which case the children shall Formal Requisites of Marriage: (ALC) (Art. 4)
be deemed illegitimate 1. Authority of solemnizing officer;
b. The absolute community or conjugal 2. Valid marriage License (except in cases
partnership shall be Dissolved and where a marriage license is not required);
liquidated and
c. If either spouse acted in Bad faith, his/her a. Valid only for 120 days from
share in the net profits shall be forfeited: issue in any part of the
i. In favor of the common children Philippines
ii. If none, in favor of the children 3. Marriage Ceremony where the
of the guilty spouse by contracting parties appear before the
previous marriage solemnizing officer, with their personal
iii. In default of children, in favor of declaration that they take each other as
the innocent spouse. husband and wife in the presence of not
d. Donations by reason of the marriage less than two witnesses of legal age.
remain valid except if the donee
contracted the marriage in bad faith (in
2. EXEMPTION FROM LICENSE
which case, the donation is revoked by
operation of law) REQUIREMENT
e. The innocent spouse may Revoke the
designation of the spouse in bad faith as Effects of the Absence of Requisites for
the beneficiary in any insurance policy, Marriage
even if designation is stipulated as General Rule: Absence of any of the essential or
irrevocable formal requisites – void ab initio
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Exceptions: The absence of the legal impediment must be

a. If solemnized by an unauthorized person, throughout the 5-year period. (Office of the
the marriage will still be valid if either or Administrator v. Necessario, A.M. No. MTJ-07-
both contracting parties believed in good 1691, 2013)
faith that the solemnizing officer had legal
authority (Art. 35[2]) Effect of Defects in the Requisites for Marriage
b. In instances where marriage license need (Art. 4)
not be procured: • Defect in any of the essential
i. Marriage in articulo mortis (one requisites – voidable
or both of the parties at the point • Irregularity in any of the formal
of death) (Art. 27) requisites – does not affect the validity of
ii. If the residence of either party is the marriage by will make the party
so remote there is no means of responsible civilly, criminally, or
transportation to enable such administratively liable
party to appear personally before
the civil registrar (Art. 28) Authorized Solemnizing Officers: (JPCCCM)
iii. Marriage solemnized outside the (Art. 7)
Philippines where no marriage 1. Incumbent member of the Judiciary
license is required by the country (judge – within the court’s jurisdiction;
where it was solemnized (Art. Justices – within Philippine territory)
26) 2. Any Priest, rabbi, imam or the minister
iv. Marriage among Muslims or of any church or religious sect
among members of ethnic a. Duly authorized by his church
cultural communities in or religious sect
accordance with their customs b. Registered with the civil
(Art. 33) registrar general;
v. Marriage between persons who c. Within limits of the written
have lived together as husband authority of the church or
and wife for at least five years sect; and
and without any legal d. At least one of the
impediment to marry each other contracting parties belongs to
during the 5-year period of the church or religious sect.
cohabitation (Art. 34) 3. Ship Captain or airplane chief
a. At least one of the parties is
Procedural Requirements in Case of in articulo mortis;
Cohabitation for Five Years:
b. Between passengers or
a. The parties must execute an affidavit
crew members; and
stating that they have lived together for at
c. While the ship is at sea or the
least 5 years and are without legal
plane is in flight and also
impediment to marry each other; and
during stopover at ports of
b. The solemnizing officer must execute a
call (Art. 31)
sworn statement that he had ascertained
4. Military Commander (Art. 7 and Art.
the qualifications of the parties and that
32)
he had found no legal impediment to their
marriage (Art. 34)
a. Must be a commissioned
officer
NOTE: Absence of any of these procedural b. Of a unit to which a chaplain
requirements does not make the marriage void. is assigned;
What is indispensable is the 5-year cohabitation c. Chaplain is absent at the time
as husband and wife. of marriage;
d. During military operations;
The 5-year period should be a period of e. Must be one in articulo mortis;
cohabitation characterized by exclusivity – and
meaning no third party was involved at any time f. Between persons within the
– that is, unbroken. (Niñal v. Bayadog, G.R. zone of military operations or
No. 133778, 2000) whether members of the
armed forces or civilians
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g. Consul-general, consul, or and criminal liability

vice-consul Between Filipino may attach. (Art. 16)
citizens abroad
h. Mayor- effective January 1, If they get married
1992 (LGC); during the 3-month
period without a
Venues for Marriage (Art. 8) (Directory) license, the marriage
General Rule: Must be solemnized publicly, and shall be void for lack
not elsewhere, in the: of a
formal requirement.
a. Chambers of the judge or in open court No marriage license
b. Church, chapel, or office of consul-general, will be issued in the
consul, or vice-consul absence of Certificate
of Compliance issued
Exceptions: by the Family
a. Marriage at the point of death (in articulo Planning Office. (R.A.
mortis) 10354, Sec. 15)
b. Marriage in remote places
c. Marriage at a house or place Marriage Certificate
designated by the parties in a sworn While a marriage certificate is considered the
statement upon their written request to primary evidence of a marital union, it is not
the solemnizing officer regarded as the sole and exclusive evidence of
marriage. The fact of marriage may be proven by
Other Requirements (Art. 14-15) relevant evidence other than the
EITHER OR BOTH REQUIRES marriage certificate. Hence, even a person’s birth
PARTIES certificate may be recognized as competent
18 years old and • Parental evidence of the marriage between his parents.
above but below 21 consent (Anonuevo v. Int. Estate of Jalandoni, G.R. No.
• Marriage 178221, 2010)
counseling
21 years old and above • Parental 3. MARRIAGES SOLEMNIZED
but below 25 advice ABROAD AND FOREIGN DIVORCE
• Marriage
Counseling MARRIAGES CELEBRATED ABROAD (Art. 26,
par. 1)
Effects of Lack of Parental Consent, Parental
Advice, or Marriage Counselling If Required General Rule: Marriages solemnized outside the
GROUND EFFECTS Philippines in accordance with the laws of the
Lack of parental Marriage is voidable foreign country shall be valid here (lex loci
consent celebrationis)
• Basis: Principle of Comity
• However, if solemnized inside the
Lack of parental advice No effect on validity of
or failure to attach
Philippine Consulate abroad, Philippine
marriage. However,
certificate of marriage laws must be observed
this will suspend
counseling the issuance of
Exceptions to Lex Loci Celebrationis
the marriage license
a. Where either or both parties are below 18
for 3 months from
years old
the completion of
b. Bigamous or polygamous marriage
publication of the
(except Art. 41 on presumptive death of
application. (Art. 16)
spouse)
c. Mistake in identity
If they get married
d. Marriage void under Art. 53 – contracted
during the 3-month
following the annulment or declaration of
period with a license,
nullity of a previous marriage but before
the marriage shall be
recording of partition
valid but civil
e. Psychological incapacity
f. Incestuous marriage
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g. Marriage void for reasons of public policy respondent in the foreign divorce proceeding
(Republic v. Manalo, G.R. No. 221029, 2018).
Thus, what is dispensed with are merely the Article 26 should be interpreted to mean that it is
authority of the solemnizing officer and the irrelevant for courts to determine if it is the foreign
marriage license requirements. spouse that procures the divorce abroad. Once a
divorce decree is issued, the divorce becomes
Is the “marriage ceremony” requirement "validly obtained" and capacitates the foreign
dispensed with, thus allowing common-law spouse to marry. The same status should be given
marriage? – NO, Art. 26 of the Family Code uses to the Filipino spouse. The national law of Japan
the word “solemnized”. However, if solemnized does not prohibit the Filipino spouse from initiating
abroad, the ceremony prescribed in the place of or participating in the divorce proceedings. It
celebration shall apply. would be inherently unjust for a Filipino woman to
be prohibited by her own national laws from
Is the same-sex marriage of Filipinos abroad something that a foreign law may allow (Racho v.
valid? NO, Article 15 of the Civil Code provides Seiichi Tanaka, G.R. No. 199515, June 25, 2018)
that laws relating to family rights and duties, or to
status, condition and legal capacity of persons are NOTE: The determinative point when the foreigner
binding upon citizens of the Philippines, even who procured the divorce should be a foreigner
though living abroad. In the Philippines, a person at the time of the divorce, and not at the time of
has legal capacity to marry only a person of the the marriage ceremony.
opposite sex. Hence, public policy mandates that
only a man and woman can marry each other. How to prove foreign divorce:
1. Present the divorce decree, proven as a
To establish a valid marriage, it is necessary to public or official record of a foreign
prove: country by either:
a. An official publication; or
1. The foreign law as a question of fact; and b. A copy thereof attested by
2. The celebration of marriage pursuant the officer having legal custody of
thereto by convincing evidence (Ching the document
Huat v. Co Heong. G.R. No. L-1211) c. If the record is not kept in the
Philippines, such copy must be:
NOTE: If such law of the other state is not pleaded i. Accompanied by a
nor proved and for purposes of determining the certificate issued by the proper
validity of a marriage in the said state, the laws of or consular officer in the
such state, in the absence of proof to the contrary, Philippine foreign service
will be presumed by the Court to be the same as stationed in the foreign country
the laws of its own state. (Processual in which the record is
presumption) kept; and
ii. Authenticated by the seal of
FOREIGN DIVORCE his office
2. Prove the conformity of the decree to the
Requisites for a Filipino Spouse to Gain foreign law (Garcia v. Recio, 2001)
Capacity to Remarry under Philippine Law
After Divorce with Foreigner-spouse (Art. 26, Settled is the rule that in actions involving the
par. 2) recognition of a foreign divorce judgment, it is
1. A valid marriage that had been celebrated indispensable that the petitioner proves not only
between a Filipino citizen and a foreigner; the foreign divorce judgment granting the divorce,
and but also the alien spouse’s national law. The
2. A valid divorce subsequently obtained English translation submitted was published by
abroad by the alien spouse capacitating him Eibun Horei-Sha, Inc., a private company in Japan
or her to remarry engaged in publishing English translation of
Japanese laws, which came to beknown as the
The letter of the law does not demand that EHS Law Bulletin Series. However, these
the alien spouse should be the one who initiated translations are "not advertised as a source of
the proceeding wherein the divorce decree official translations of Japanese laws;" rather, it is
was granted. It does not distinguish whether in the KANPŌ or the Official Gazette where all
the Filipino spouse is the petitioner or the official laws and regulations are published, albeit
in Japanese. Accordingly, the English translation
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submitted by Mrs. X is not an official publication enough staff to search for the marriage license is
exempted from the requirement of authentication. not adequate and will not prove absence of a
Neither can the English translation be considered marriage license. The certification, in fact, proves
as a learned treatise. (Arreza v. Toyo, G.R. No. that no diligent search was made. (Sevilla vs.
213198, July 1, 2019) Cardenas, G.R. No. 167684, 2006)
4. VOID AND VOIDABLE A Certification of the Civil Registrar to the

MARRIAGES effect that “after a diligent search on the files of
Registry Book on Application for Marriage
VOID MARRIAGES License and License Issuance available in this
office, no record could be found on the alleged
Marriages Void from the Beginning (Void Ab issuance of this office of Marriage License No.
Initio): XXXXX in favor of Mr. A and B dated XXXX” does
not categorically prove that there was no marriage
A. Void under Article 35: license. Furthermore, marriages are not dissolved
a. Contracted by any party below 18 years through mere certifications by the civil registrar. It
old; will be wrong to establish a doctrine that a
b. Solemnized by an unauthorized certification that a marriage license cannot be
solemnizing officer found may substitute for a definite statement that
i. Exception: If either or both parties no such license existed or was issued (Vitangcol
believed in good faith that the v. People, G.R. No. 207406, 2016).
officer had authority
c. Solemnized without a valid marriage The Certification by the Municipal Civil
license Registrar that the Office of the Local Civil
i. Exception: When license not Registrar “has no record nor copy of any marriage
required license” ever issued in favor of petitioner and
d. Bigamous or polygamous marriages respondent, coupled with respondent’s failure to
i. Exception: Art. 41 – Marriage prfoduce a copy of the alleged marriage license
contracted by a person whose or of any evidence to show that such license was
spouse has been absent for 4 ever issued, proves that no valid marriage license
years (ordinary absence) or 2 was, in fact, issued (Kho v. Republic and Kho,
years (extraordinary absence), G.R. No. 187462, 2016)
where such person has a well
founded belief that his/her absent Valid Bigamous Marriages
spouse is already dead, and had
obtained a declaration of General Rule: Marriage contracted by any person
presumptive death, and at the time during the subsistence of a previous marriage is
of marriage ceremony is in good void (Art. 35)
faith together with the subsequent
spouse Exception: If subsequent marriage was
e. Those contracted through mistake of contracted with a valid declaration of presumptive
one contracting party as to the identity death.
of the other; and
f. Those subsequent marriages that are First marriage was not judicially declared void nor
void under Article 53. was Z judicially declared presumptively dead
B. Psychological Incapacity (Art. 36) under the Civil Code. Parties to a marriage should
C. Incestuous Marriage (Art. 37) not be permitted to judge for themselves its nullity,
D. By Reasons of Public Policy (Art. 38) only competent courts having such authority. Prior
to such declaration of nullity, the validity of the first
Good faith marriage (Art. 35[2]) marriage is beyond question. A party who
Good faith means an honest and reasonable belief contracts a second marriage then assumes the
that the marriage was valid at its inception, and risk of being prosecuted for bigamy. The absolute
that no legal impediment exists to impair its validity nullity of a previous marriage may be invoked for
(52 Am. Jur. 2d 96) purposes of remarriage on the basis solely of a
final judgment declaring such previous marriage
Marriage without a valid marriage license void. Bigamy was consummated when X
A certification of no marriage license by the subsequently married Y without his first marriage
local civil registrar stating that there was not
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to Z having been judicially declared void (Vitangcol Mere sexual infidelity or perversion and
v. People, G.R. No. 207406, 2016). abandonment do not by themselves
constitute psychological incapacity within the
Mistake in Identity (Art. 35[5]) contemplation of the Family Code. (Dedel v. CA,
The contemplated mistake refers to the actual G.R. No. 151867, 2004)
physical identity of the other party, and not merely One of the essential marital obligations is "to
mistake in the name, character, age, or other procreate children based on the universal principle
attributes of the person. that procreation of children through sexual
cooperation is the basic end of
Subsequent Marriage Void under Art. 53 marriage." Constant non-fulfillment of this
A person whose marriage has been annulled or obligation will finally destroy the integrity or
declared null and void may remarry as long as, wholeness of the marriage. The senseless and
after the marriage is annulled/nullified, he does the protracted refusal of one of the parties to fulfill this
following: marital obligation is equivalent to psychological
1. Partition and distribution of the properties incapacity. (Chi Ming Tsoi v. CA, G.R. No. 119190,
of the spouses; 1997)
2. Distribution of the presumptive legitimes
of the children; and A finding of psychological incapacity on the part of
3. Recording of the judgement of annulment one spouse shows non-cognizance of one’s
or absolute nullity (Art. 40), the partition essential marital obligation, and therefore negates
and distribution, and the delivery of the bad faith. As a consequence, moral and
presumptive legitimes in the appropriate exemplary damages cannot be awarded. Moral
civil registry and registries of the damages should be predicated on specific
property. evidence that was done deliberately and with
malice by a party who had known of his or her
Failure to comply with these requisites will make disability and yet willfully concealed the
the subsequent marriage void ab initio. same. (Buenaventura v. CA, GR No. 127358,
Furthermore, failure to record in the proper 2005)
registries will mean that such will not affect third
persons (Art. 52-53). The burden falls upon petitioner, not just to prove
that respondent suffers from a psychological
Liquidation, partition, and distribution of disorder, but also that such psychological disorder
presumptive legitimes apply only to renders her "truly incognitive of the basic marital
marriages declared void under Art. 40 and 45. covenants that concomitantly must be assumed
(Diño v. Diño, G.R. No. 178044, 2011) and discharged by the parties to the marriage."
(Baccay v. Baccay, GR No. 117318, 2010)
Psychological Incapacity (Art. 36)
Marriage where any of the parties, at the time of Jurisprudential guidelines: (BRE-IGO-IC)
the celebration of the marriage, was a. Burden of proof to show the nullity of
psychologically incapacitated to comply with the marriage is upon the plaintiff;
essential marital obligation, even if incapacity b. The Root cause of the psychological
becomes manifest only after solemnization. incapacity must be: (CCEE)
a. Medically or Clinically identified;
Psychological Incapacity must be judged on a b. Alleged in the Complaint;
case-by-case basis. It should refer to no less than c. Sufficiently proven by Experts
a mental (not physical) incapacity. It must be d. Clearly Explained in the decision
characterized by: (JIG) c. The incapacity must be proven to be
1. Juridical antecedence Existing at the time of the celebration of
2. Incurability the marriage
3. Gravity (Carating-Siaynco v. Siaynco, d. Such incapacity must be shown to be
G.R. No. 158896, 2004) medically or clinically permanent or
Incurable
Mere showing of irreconcilable differences and e. Such illness must be Grave enough to
conflicting personalities do not constitute bring about the disability of the party to
psychological incapacity. (Carating-Siaynco assume the essential obligations of
v. Siaynco, G.R. No. 158896, 2004) marriage
f. Essential marital Obligations must be
those embraced by Arts. 68-71, as well as
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Arts. 220, 221, and 225 of the Family o No prior criminal conviction by
Code. the court is required by the law
g. Interpretations given by the National since mere preponderance of
Appellate Matrimonial Tribunal of the evidence is required to prove the
Catholic Church in the Philippines, while killing
not controlling or decisive, should be
given great respect by our courts The following can marry each other:
h. The trial court must order the prosecuting a. Brother-in-law and sister-in-law
attorney or fiscal and the Solicitor General b. Stepbrother and stepsister
to appear as Counsel for the State c. Guardian and ward
d. Adopted and illegitimate child of the adopter
NOTE: The foregoing guidelines do not require e. Parties who have been convicted of adultery
that a physician examine the person to be or concubinage
declared psychologically incapacitated. What is
important is that the totality of evidence can NOTE: Relationship by affinity between
adequately establish the party’s psychological the surviving spouse and the kindred of the
condition. (Republic v. CA & Molina, G.R. No. deceased spouse continues even after the death
108763, 1997) of the deceased spouse, regardless of whether
the marriage produced children or not. (Vda.
“Totality of Evidence” principle means that de Carungcong v. People, G.R. No. 181409,
medical experts’ testimony is not required, if the 2010)
totality of all other evidence presented is sufficient
to prove psychological incapacity. If not, the Subsequent Marriage Without Judicial
testimony of experts is crucial. (Marcos v. Marcos, Declaration of Nullity of Previous Void
G.R. 136490, 2000) Marriage
For purposes of remarriage, the only acceptable
Incestuous Marriage (Art. 37) evidence that the previous marriage has been
Whether the relationship is legitimate or voided is a final judgment declaring such marriage
illegitimate: null and void; if the purpose is NOT TO
a. Between ascendants and descendants of REMARRY, other evidence can be presented to
any degree prove the nullity of the previous marriage. (Art. 40)
b. Between brothers and sisters, whether full or
half blood Even if a marriage is void, it must be declared
void first by final judgment before the parties to
Void for Reasons of Public Policy (Art. 38) such void marriage can remarry. The parties
(exclusive list) cannot decide for themselves the invalidity of
a. Between collateral blood relatives up to their marriage.
4th civil degree
o There is no prohibition regarding ABSENCE of a formal requisite of
marriages between collateral solemnization of Marriage – A judicial declaration
blood relatives by half-blood of nullity is not needed where the parties merely
b. Between step-parents and step-children signed a marriage contract on their own and NO
c. Between parents-in-law and children-in- marriage ceremony was performed by a duly
law authorized solemnizing officer. Such act alone,
d. Between adopting parent and adopted without more, cannot be deemed to constitute an
child ostensibly valid marriage (Morigo v. People, G.R.
e. Between surviving spouse of the adopter No. 145226, 2004).
and the adopted child
f. Between surviving spouse of the adopted VOID Marriage under the Civil Code – If a
child and the adopter marriage is void under a ground provided in the
g. Between adopted and a legitimate child of Civil Code and a subsequent marriage
adopter was contracted before the effectivity of the FC
h. Between adopted children of same without having the first marriage declared null and
adopter void, the second marriage is valid. The Civil Code
i. Between parties where one, with the contains no express provision on the necessity
intention to marry the other, killed the of a judicial declaration of nullity of a
other person’s spouse or his/her own marriage considered void under the Civil Code.
spouse The requirement of a judicial decree of nullity does
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not apply to marriages celebrated before

the effectivity of the Family Code, particularly if a. Annulment under Article 36 (as
the children of the parties were born while the recently articulated under Tan-
Civil Code was in force. (Castillo v. Castillo, G.R. Andal v. Andal, G.R. No.
No. 189607, 2016) 196359, May 11, 2022; Totality
of Evidence Rule)
VOIDABLE MARRIAGES
Grounds for Annulment (PUFFIS) (Art. 45)
a. Lack of Parental consent Psychological incapacity is not a medical but
b. Either party is of Unsound mind a legal concept. It refers to a personal
c. Fraudulent means of obtaining consent condition that prevents a spouse to comply
of either party with fundamental marital obligations only in
d. Consent was obtained by Force, relation to a specific partner that may exist at
intimidation, or undue influence the time of the marriage but may have revealed
e. That either party was physically Incapable through behavior subsequent to the
of consummating the marriage with the ceremonies. It need not be a mental or
other. Such incapacity: personality disorder. It need not be a
i. Continues; and permanent and incurable condition. Therefore,
ii. Is Incurable the testimony of psychologist or psychiatrist
f. Either party afflicted with a Sexually is not mandatory in all cases. The totality of the
transmissible disease. The disease: evidence must show clear and convincing
i. Is found to be Serious; and evidence to cause the declaration of nullity of
ii. Appears to be incurable marriage.
Circumstances constituting fraud (Art. 46)

a. Non-disclosure of conviction by final
judgment of crime involving moral
turpitude
b. Concealment of pregnancy by another
man
c. Concealment of sexually transmissible
disease, regardless of nature, existing at
the time of marriage
d. Concealment of drug addiction, habitual
alcoholism, homosexuality and
lesbianism
ARTICLE 45 STD ARTICLE 46 STD

Ground for annulment Type of fraud which is
a ground for
annulment
Does not have to be Must be concealed
concealed
Must be serious and Need not be serious
appears to be and appear to be
incurable incurable
STD itself is a ground It is the concealment
for annulment of which constitute the
ground for annulment
Doctrine of Triennial Cohabitation

Presumption that the husband is impotent should
the wife still remain a virgin after 3 years of living
together with her husband. Burden of proof to
prove non-impotency shifts to the husband.
NOTE: Grounds for annulment must exist at

the time of the celebration of the marriage.
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BASIS VOID VOIDABLE

As to nature Inexistent from the time of performance Valid until annulled
As to prescriptibility Does not prescribe (Art. 39) Prescriptive period depends on the
ground/s invoked.
As to how (a) May be attacked directly or (a) Cannot be attacked collaterally,
marriage may be collaterally but for the purpose of only directly (i.e. there must be a
impugned remarriage, there must be a judicial decree of annulment)
declaration of nullity
(b) Can no longer be impugned after
(b) Direct: Only the spouses death of one of the parties
(c) Collateral: Any interested party in

any proceeding where the
determination of the validity of the
marriage is necessary to give rise to or
negate certain rights
Venue for action Family Court of the province or city where the petitioner or the respondent has been
residing for at least 6 months prior to the date of filing (if the respondent is a non-
resident: where he may be found in the Philippines) at the election of the petitioner.
(A.M. No. 02-11-10-SC)
As to susceptibility Cannot be ratified Can be ratified either by free
to ratification cohabitation or prescription
As to effect No community property, only co- Absolute community exists unless they
on property ownership (Art. 147/148) agreed upon another system in their
marriage settlement
As to effect on Children are illegitimate Children are legitimate if conceived
children Except those falling under the following: before decree of annulment
i. In case of psychological incapacity
(Art. 36)
ii. Children born of subsequent marriage
(Art. 53)
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SUMMARY FOR VOIDABLE MARRIAGES
GROUNDS WHO CAN PRESCRIPTIVE PERIOD RATIFICATION

FOR
ANNULMENT
Lack of Underage party (18- Within 5 years after turning 21 Free cohabitation after
parental 21 years old) reaching 21
consent
Parent or guardian Before child reaches 21
Insanity of one Sane spouse who Before the death of the other party Free cohabitation after
party had no knowledge of insane spouse regains
insanity sanity
Guardian of insane Any time before the death of either party

spouse
Insane spouse During lucid interval or after regaining

sanity also before death of other party
Fraud Injured Party Within 5 years after discovery of fraud Free cohabitation with full
knowledge of facts
constituting the fraud
Vitiated Within 5 years from time force, Free cohabitation after the
consent intimidations or undue influence cause (force, intimidation,
disappeared or ceased undue influence)
disappeared or ceased.
Intimidation can be on the
person or the property of the
injured party and his/her
immediate family
Incapability to Within 5 years after the marriage No ratification since defect is
consummate/ ceremony permanent, but right of
STD action may prescribe
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EFFECTS OF VALID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND ANNULMENT
VALID BIGAMOUS
MARRIAGE (ART. 41- WITH DECLARATION OF NULLITY ANNULMENT
DECLARATION OF
PRESUMPTIVE DEATH)
Status of Children of subsequent Illegitimate except Art. 36 and Children conceived or born
Children marriage conceived before its Art. 53. before annulment decree –
termination – legitimate legitimate
Property ACP/CPG shall be liquidated. If void under Art. 40 (when ACP/CPG shall
Relations contracted by a spouse of a be liquidated.
The share in the net profits prior valid marriage, before
of community property or the latter is judicially declared The share in the net profits
conjugal partnership property of void): Same as property of community property or
the spouse who contracted the relations of Valid Bigamous conjugal partnership
marriage in bad faith, shall be Marriage. Par. 2 of Art. 43 property of the spouse
forfeited in favor of applies. who contracted the
common children or if there are marriage in bad faith, shall
none, children of the guilty If not void under Art. 40, the be forfeited in favor of
spouse by previous marriage or provisions of Arts. 147 and 148 common children or if there
in default thereof, the govern. The share of the are none, children of the
innocent spouse. (Art. 43 [2]) party in bad faith in the co- guilty spouse by previous
ownership shall be forfeited in marriage or in default
favor of their common children. thereof, the
innocent spouse. Same as
Art. 40
Donations Shall remain valid except: If void under Art. 40: Same as Same as effect on donations
Propter effect on donations for Valid for Valid Bigamous
Nuptias - If donee contracted the Bigamous Marriage. Par. 3 of Marriage. Par. 3 of Art. 43,
marriage in bad faith, donations Art. 43, and Art. 44, apply. and Art. 44, apply.
propter nuptias made to the
donee are revoked If not under 40: option belongs
by operation of law. (Art. 43[3]) to the donee. (Art. 86[1])
- If both spouses acted in bad

faith, donations propter nuptias
made by one in favor of the
other are revoked by operation
of law.
Succession If one spouse contracted the If void under Art. 40: Same as Same as effect on
marriage in bad faith, he shall effect on succession for Valid succession for Valid
be disqualified to inherit from Bigamous Marriage. Par. 5 of Bigamous Marriage. Par. 5
the innocent spouse in both Art. 43, and Art. 44, apply. of Art. 43, and Art. 44, apply.
testate and intestate
succession. (Art. 43[5])
If marriage is void,
If both spouses acted in bad no successional rights
faith, all testamentary involved.
dispositions made by one in
favor of the other are revoked by
operation of law. (Art. 44)
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C. LEGAL SEPARATION (Art. 58) except interlocutory matters such as

the determination of custody of children,
1. GROUNDS alimony, and support pendente lite.
Grounds for Legal Separation: (PRC-FAAL BILA) (Art. No legal separation may be declared unless the
55) court has taken steps towards the reconciliation
d. Repeated Physical violence or grossly abusive of the spouses and is fully satisfied, despite
conduct directed against petitioner, a common such efforts, that reconciliation is highly
child or a child of the petitioner improbable. (Art. 59)
e. Physical violence or moral pressure to compel the
petitioner to change Religious or The six-month-cooling-off-period requirement
political affiliation can be dispensed with if the ground for legal
f. Attempt of respondent to Corrupt or induce the separation involves violence against the woman
petitioner, a common child, or a child of or the child. Thus, the Court shall proceed on
the petitioner, to engage in prostitution, the main case and other incidents of the case as
or connivance in such corruption or inducement soon as possible (Sec. 28, RA 9262).
g. Final judgment sentencing respondent to
imprisonment of more than 6 years (even Stipulation of Facts or Confession of
if pardoned) Judgement
h. Drug Addiction or habitual Alcoholism No decree of legal separation shall be based
i. Lesbianism or homosexuality upon a stipulation of facts of confession of
j. Subsequent Bigamous marriage judgement. In any case, the court shall order
k. Sexual Infidelity or perversion the prosecuting attorney or fiscal assigned to it
l. Attempt by respondent against the Life of the to take steps to prevent collusion between the
petitioner parties and to take care that the evidence is not
m. Abandonment for more than 1 year without fabricated or suppressed. (Art. 60)
justifiable cause
4. EFFECTS OF FILING PETITION
2. DEFENSES
Effects of Filing a Petition for Legal
Grounds to Deny Legal Separation/Defenses to Legal Separation (Art. 61)
Separation: (C4-D-GRP) (Art. 56)
a. Condonation a. The spouses shall be entitled to live
separately from each other;
NOTE: Failure of the husband to look for his b. The court, in the absence of a written
adulterous wife is not a condonation of wife’s agreement between the spouses, shall
adultery. designate either of them or a third person to
administer the absolute community or
b. Consent conjugal partnership property. The
c. Connivance administrator appointed by the court shall
d. Collusion have the same powers and duties as those
e. Death of either party during the pendency of of a guardian under the Rules of Court
the case (Lapuz-Sy v. Eufemio, G.R. No. L-
30977, 1972). 5. EFFECTS OF PENDENCY
f. Equal Guilt
g. Reconciliation of the spouses during Effects of Pendency of Action for Legal
the pendency of the case (Art. 66) Separation (Art. 62 in relation to Art. 49)
h. Prescription During the pendency of the action and in
the absence of adequate provisions in a
3. PROCEDURE written agreement between the spouses, the
Court shall provide for the following:
When to file/try an action for legal separation a. The support of the spouses
An action for legal separation shall be filed within 5 years b. The custody and support of their
from the time of occurrence of the cause (Art. 57). The common children;
time of discovery of the ground for legal separation is not
material in the counting of the prescriptive period. NOTE: The Court shall give
paramount consideration to the
The action for legal separation shall not be tried before 6 moral and material welfare of said
months shall have elapsed since the filing of the petition, children and their choice as to the
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parent with whom they wish to remain in the registries of property shall be
respected.
c. Appropriate visitation rights of the other parent b. Innocent spouse may revoke
designation of guilty spouse as
6. EFFECTS OF DECREE OF LEGAL beneficiary in the insurance policy
SEPARATION (ART. 63) even if such designation be
stipulated as irrevocable. The
a. Spouses are entitled to live separately revocation of or change in the
b. Marriage bond is not severed designation of the insurance
c. Dissolution of property regime beneficiary shall take effect upon
d. Forfeiture of the share of the guilty spouse in the written notification to the insured.
net profits of the ACP/CPG
NOTE: Action to revoke the donation must be
NOTE: For purposes of computing the net profits brought within 5 years from the time the decree
subject to forfeiture, the said profits shall be has attained finality.
the increase in value between the market price
of the community property at the time of the 7. RECONCILIATION
celebration of the marriage and at the time of
dissolution. What is forfeited is not the share of Reconciliation
the guilty spouse in the liquidation of the If the spouses should reconcile, a corresponding
community property but merely the profits. joint manifestation under oath duly signed
(Siochi v. Gozon GR Nos. 169900 and 169977, by them shall be filed with the court in the same
2010) proceeding for legal separation (Art. 65).
If there is no separate property, the net
remainder is the profit and therefore the Effects of Reconciliation
remainder (which includes the profit) pertaining a. The legal separation proceedings, if still
to the share of the guilty spouse is his/her entire pending, shall thereby be terminated at
share which must be forfeited (Quiao v. Quiao, whatever stage (Art. 66)
2012) b. The final decree of legal separation
shall be set aside (Art. 66)
e. Custody of minor children to innocent spouse c. The separation of property and any
(subject to Art. 213: parental authority shall be forfeiture of the share of the guilty
exercised by parent designated by the court) spouse already effected shall subsist,
unless the spouses agree to revive
The imposed custodial regime under the their former property regime (Art. 66)
second paragraph of Article 213 is limited in d. Joint custody of the children is restored
duration, lasting only until the child’s seventh e. The right to intestate succession by the
year. From the eighth year until the child’s guilty spouse from the innocent spouse
emancipation, the law gives the separated is restored
parents freedom, subject to the f. The right to testamentary succession
usual contractual limitations, to agree on depends on the will of the innocent
custody regimes they see fit to adopt spouse
(Dacasin vs. Dacasin, G.R. No. 168785,
2010). 8. EFFECT OF DEATH OF ONE OF
THE PARTIES
f. Guilty spouse is disqualified from intestate
succession and provisions made by innocent Effect of Death (Sec. 21, Rule on Legal
spouse in his favor in a will shall be revoked by Separation, A.M. No. 02-11-11-SC)
operation of law In case a party dies at any stage of proceedings
before the entry of judgment, the court shall
Effects Upon Finality of the Decree (Art. 64) order the case closed and terminated without
a. Innocent spouse may revoke the donation prejudice to the settlement of estate proper
made by him or her in favor of the offending proceedings in the regular courts.
spouse. The revocation of the donations shall
be recorded in the registries of property in the If the party dies after the entry of judgment, the
places where the properties are located. same shall be binding upon the parties and their
However, alienations, liens and successors in interest in the settlement of the
encumbrances registered in good faith before estate in the regular courts.
the recording of the complaint for revocation
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D. RIGHTS AND OBLIGATIONS BETWEEEN E. PROPERTY RELATIONS BETWEEN

HUSBAND AND WIFE HUSBAND AND WIFE
Obligations of Husband and Wife (L2H2DS) (Art. 68- 1. GENERAL PROVISIONS

71)
a. Live together What Governs Property Relations Between
b. Observe mutual Love, respect and fidelity Spouses (Art. 74)
c. Render mutual Help and support a. Marriage Settlement – future spouses
d. Management of the Household may agree upon the regime of ACP,
e. Fix the family Domicile CPG, complete separation of property,
f. Joint responsibility for the Support of the family or any other regime
b. Family Code – if there is no marriage
Fixing the Family Domicile (Art. 69) General rule: The
settlement or when the regime agreed
husband and wife shall fix the family domicile
upon therein is void, the system of ACP
Except: In case of disagreement, the court shall decide. shall govern
c. Local customs
NOTE: The Court may exempt one spouse from living
with the other if the latter should live abroad or there are General Rule: Property Relations are governed
other valid and compelling reasons, unless it is not by Philippine laws (Art. 80)
compatible with the solidarity of the family. Exceptions:
a. When there is a contrary stipulation in the
Sources for Support and Management of Household marriage settlement
(Art. 70-71): b. When both are aliens, even if married in
a. From the community property the PH
b. In the absence thereof, from the income or fruits c. As to extrinsic validity of contracts
of the separate properties affecting property not situated in the
c. In case of insufficiency or absence thereof, from Philippines (Art. 80).
their separate properties
MARRIAGE SETTLEMENTS
Right to Bring an Action in Court (Art. 72) When one Requisites of a Valid Marriage Settlement:
of the spouses neglects his or her duties to the conjugal (WSB-TCR)
union or commits acts which tend to bring danger, 1. In Writing;
dishonor, or injury to the other or to the family, the 2. Signed by the parties;
aggrieved party may apply to the court for relief. 3. Executed Before the celebration of
marriage
Profession (Art. 73) 4. To fix the Terms and conditions of their
General Rule: Either spouse may exercise any legitimate property relations;
profession, business, or activity without the consent of the 5. If the party executing the settlement is
other. under Civil interdiction or any other
Exception: The other spouse may object on valid, disability, the guardian appointed by the
serious and moral grounds. In case of disagreement, the court must be made a party to the
court shall decide whether: settlement (Art. 79); and
a. The objection is proper, and 6. Registration (merely to bind 3rd
b. Benefit has accrued to the family before or after persons)
the objection.
Requisites for a Valid Modification of
If benefit accrued to the family before the objection, the Marriage Settlement:
resulting obligation shall be enforced against the a. In writing;
community property. b. Signed by the parties;
c. Executed before the celebration of the
If benefit accrued to the family after the objection has marriage, unless:
been made, the resulting obligation shall be enforced i. there is a revival of property
against the separate property of the spouse who has not regime in case of reconciliation in
obtained consent (R.A. 10572, 2013) legal separation proceedings
(Art. 66-67)
NOTE: This is without prejudice to the rights of creditors ii. there is sufficient cause for
who acted in good faith. judicial separation of property
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under Art. 135 celebrated or is judicially declared void ab

iii. spouses file for voluntary dissolution of marriage shall be void, while those not
property regime under Art. 136 dependent shall remain valid.
d. Registration: to bind 3rd persons DONATION PROPER NUPTIAS V ORDINARY

DONATIONS
Effectivity of a Marriage Settlement in Consideration
of Future Marriage DONATION ORDINARY
Everything stipulated in the settlements or contracts PROPTER DONATIONS
referred to in the preceding articles in consideration of a NUPTIAS
future marriage, including donation made between Formalities Governed by Governed by
prospective spouses, shall be void if the marriage does the rules on rules on
ordinary donations
not take place. Stipulations not dependent on the
donations (Arts. 725-773
celebration of the marriage shall be valid (Art. 81).
except if NCC)
future
2. DONATIONS BY REASON OF property, it
MARRIAGE must
conform with
Requisites: (BCF) (Art. 82) formalities of
1. Made Before celebration of marriage; wills
2. In Consideration of marriage; and Present May be No person
3. In Favor of one or both future spouses Property donated but may give or
up to 1/5 of receive, by
General Rule: Future spouses cannot donate to each donor's way of
other more than 1/5 of their present property. Any excess present donation, more
shall be considered void (Art. 84) property than he may
give or receive
Exception: If they are governed by ACP (because they by will. (Art.
own everything in common) 752)
Future May be Cannot be
Grounds to Revoke Donation Propter Nuptias: Property included included
(CARNIVAL) (Art. 86) provided
a. Marriage without the needed parental Consent donation is
b. Marriage is Annulled and donee is in bad faith mortis causa
c. If it is with a Resolutory condition and the Grounds Art. 86 of Arts. 752, 760,
condition is complied with for Family Code 764, 765 NCC
d. Marriage is Not celebrated revocation
e. Donee commits acts of Ingratitude such as:
i. Commits an offense against the Prescriptive Periods for Filing Action for
person, honor or property of the donor, Revocation of Donation Propter Nuptias
his wife, or children under his parental
authority PRESCRIPTIVE PERIODS FOR FILING
ii. Imputes to the donor any criminal ACTION FOR REVOCATION OF
DONATION PROPTER NUPTIAS
offense or any act involving moral
If marriage is not 5 years (Art. 1149
turpitude, unless the crime was
celebrated NCC) from the time
committed against the donee himself,
(Except: donations in marriage is not
his wife, or children under his authority
marriage settlements solemnized on the
iii. Unduly refuses to support the donor automatically void if fixed date
when he is legally or morally bound to marriage not
give such support celebrated)
If marriage is By operation of law if
f. Marriage is judicially declared Void Ab initio judicially declared donee-spouse
g. In Legal separation and donee is the guilty void (Note: deleted contracted
spouse items – no distinction subsequent void
made by law) marriage in bad faith,
NOTE: In case of donations included in the marriage and if not, 5 years
settlement, when the marriage thereafter is not
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from finality of judicial 91)

declaration of nullity b. Property acquired during the marriage
When marriage 5 years from by gratuitous title plus its fruits and
takes place without celebration of income, except when the donor,
the required marriage testator, or grantor expressly provides
parental consent otherwise
If resolutory 5 years from c. Property for personal and exclusive
condition is happening of use, except jewelry
complied with condition d. Property acquired before the marriage
If donee commits an 1 year from donor’s by either spouse who has legitimate
act of ingratitude knowledge of that descendants by a former marriage and
fact its fruits and income
In case of legal 5 years from the time
separation the decree of Presumption of Community Property: (Art.
separation has 93)
become final Property acquired during the marriage is
presumed to belong to the community, unless it
is proved that it is one of those excluded
3. ABSOLUTE COMMUNITY OF therefrom.
PROPERTY
Charges Upon and Obligations of the ACP
Absolute Community of property (Art. 94)
The property regime of spouses in the absence of a a. Support of spouses, their common
marriage settlement or when the regime agreed upon is
void (Art. 75) children and legitimate children of
either spouse
NOTE: It shall commence at the precise moment that the b. Debts and obligations contracted during
marriage is celebrated. Any stipulation, express or the marriage:
implied, for the commencement of the regime at any • By a designated administrator-
other time, shall be VOID (Art. 88). spouse for the benefit of the
community
No waiver of rights, interests, shares and effects of the • By both spouses
ACP during the marriage, except in case of judicial • By one with the consent of the
separation of property. The waiver must be in a public other
instrument. Creditors of the spouse who made such
• By either spouse without the
waiver may petition the court to rescind the waiver to the
consent of the other to the extent
extent that is sufficient to cover the amount of the credit
that it benefited the family
(Art. 89).
c. Taxes, liens, charges and expenses
including major or minor repairs upon
Property acquired during the marriage, whether
community property
acquisition appears to have been made in the name of
d. Taxes and expenses for mere
one or both spouses, is PRESUMED to belong to the
preservation made during the marriage
community (Art. 93).
upon the separate property of either
spouse used by the family
The original property regimes subsisting under the New
e. Expenses for professional or vocational
Civil Code when the Family Code took effect are
course
immutable and remain effective.
f. Ante-nuptial debts which redounded to
the benefit of the family
Art. 256 provides that the Family Code shall have g. Donated or promised to common
retroactive effect insofar as it does not prejudice or impair legitimate children for profession,
the vested or acquired rights in accordance with the Civil vocational course or self-improvement
Code or other laws. h. Other ante-nuptial debts, support of
illegitimate child, and liabilities for crime
General Rule: The community property consists of all or quasi-delicts in the absence of
the property owned by the spouses before, at the time separate property are chargeable
of, or after the celebration of the marriage (Art. 91). against the separate properties of the
spouses but may be advanced by the
Exceptions/Exclusions from Community Property ACP in case of absence or
(Art. 92) insufficiency of the exclusive property of
a. Those indicated in the marriage settlement (Art. the debtor-spouse
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i. Expenses of litigation between spouses unless of the court before the offer is
the suit is found to be groundless withdrawn by either or both offerors.
NOTE: If the community property is insufficient to cover Donation of Community Property

all these liabilities (except those falling under cases of General rule: Neither spouse may donate any
absence or insufficiency of the exclusive property of the
community property without the consent of the
debtor-spouse), the spouses shall be solidarily liable for
the unpaid balance with their separate properties. other
A loan used for the family business is one which Exception: Moderate donations for charity or on
redounds to the benefit of the family, even if the business occasions of family rejoicing or family distress
fails (ROS v. Phil National Bank, GR No. 170166, 2011)
Dissolution of the ACP (Art. 99)
Under the Family Code, one spouse cannot sell property a. Upon death of either spouse
which is part of the community properties without the b. Decree of legal separation
written consent of the other spouse or the authority of the c. Marriage is annulled or nullified
court. Without such consent or authority, the entire sale d. Judicial separation of property
is void. While the law does not require a person dealing during the marriage (Arts. 134-138)
with registered land to inquire further than what the
Torrens Title on its face indicates, the rule is not Liquidation of the ACP (Art. 102)
absolute. If there are other surrounding circumstances a. Inventory of all properties
relevant to the sale which show that the purchaser should • Inventory of community property
have taken the necessary precaution required of a
• Inventory of separate property of
prudent buyer, the purchaser cannot be considered in
the wife
good faith. (Nobleza v. Nuega G.R. No. 193038, 2015)
• Inventory of separate property of
In order to be considered a buyer in good faith, the the husband
following must be shown: (a) the diligence in verifying the b. Debts and obligations of ACP are paid
validity of the title covering the property; and (b) the • In case of insufficiency of assets, the
diligence in inquiring into the authority of the transacting spouses shall be solidarily liable for the
spouse to sell conjugal property in behalf of the other unpaid balance with their separate
spouse. Mere reliance on the SPA given by the selling properties.
spouse without further questioning despite knowing that c. Remainder of the separate properties of
the lots were conjugal property is insufficient. (Spouses the spouses are returned to the owner
Aggabao v. Parulan, G.R. No. 165803, 2010) d. Net remainder of the ACP is divided
equally between husband and wife
Administration, Enjoyment, and Disposition of • Unless a different proportion is
Community Property (Art. 96) agreed upon in the marriage
General rule: It shall belong to both spouses jointly settlement or there has been a
voluntary waiver of such share
Exceptions: e. Presumptive legitimes of children are
a. In case of disagreement, the husband’s decision delivered
f. Adjudication of conjugal dwelling and
shall prevail subject to recourse by the wife in
custody of common children
court to be availed within 5 years from the date
• Given to the spouse to whom the
of the contract implementing the husband’s
majority of the common children
decision
choose to remain
b. In case of incapacity of one spouse or inability to
administer the common properties, the other Since the petitioner is the guilty party in the legal
spouse may assume sole powers of separation, his share from the net profits is
administration, except powers of disposition and forfeited in favor of the common children. In both
encumbrance which requires authority from the regimes (assuming that it was ACP), petitioner,
court or written consent of the other spouse as the guilty spouse, is not entitled to any
In the absence of such authority or consent, the property at all. The husband and the wife did not
disposition or encumbrance shall be void. have any separate properties. Therefore, there
However, the transaction shall be construed as is no separate property which may be
a continuing offer on the part of the consenting accounted for in the guilty party’s favor. (Quiao
spouse and the third person, and may be v. Quiao G.R. No. 176556, 2012)
perfected as a binding contract upon the
acceptance by the other spouse or authorization
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4. CONJUGAL PARTNERSHIP OF GAINS the value of the property of the owner-spouse)
When applicable: If the spouses agree in the marriage Exclusive Property in CPG (Art. 109)
settlement to be governed by the regime of conjugal a. That brought into the marriage as
partnership of gains his/her own
b. That acquired during the marriage
Governing law: The marriage settlement shall primarily gratuitously (net fruits and income are
govern but the provisions of the Family Code on CPG conjugal)
shall apply suppletorily. The rules on contract of c. That acquired by redemption, barter or
partnership shall also apply in all that is not in conflict exchange with exclusive property
with the marriage settlement and the provisions of the d. That purchased with exclusive money
Family Code on CPG.
Presumption of Conjugality (Art. 116)
The spouses contribute the following to a common Property acquired during the marriage,
fund (Art. 106): whether acquisition appears to have been
made in the name of one or both spouses, is
a. Proceeds, products, fruits and income of
presumed to be conjugal. The party who
separate properties of spouses invokes the presumption must first prove that
b. Everything acquired by spouses through their the property was acquired during the
efforts marriage. Otherwise, the presumption of
c. Everything acquired by spouses through conjugality will not apply. (Tan v. Andrade,
chance G.R. Nos. 171904 & 172017, 2013)
It shall commence at the precise moment that the Installment purchases (Art. 118)
marriage is celebrated. Any stipulation, express or Property bought on installments paid partly from
implied, for the commencement of the regime at any exclusive funds and party from conjugal funds:
other time shall be void. • Belongs to the buyer/s: If full
ownership vested before the
No waiver of rights allowed during the marriage except marriage
in case of judicial separation of property. The waiver
• Belongs to the conjugal
must be in a public instrument.
The fruits, natural, industrial, or civil, due or received partnership: If full ownership
during the marriage from the common property, as well vested during the marriage In either
as the net fruits from the exclusive property of each case, any amount advanced by the
spouse are included in the conjugal partnership partnership or by either or both
properties. (Art. 117(3)) spouses shall be reimbursed by
the owner upon liquidation.
What Constitutes CPG (FOLCHIC) (Art. 117)
a. Fruits of conjugal property due or received Credits in Installment (Art. 119)
during the marriage and net fruits of separate Whenever an amount or credit payable within a
property period of time belongs to one of the spouses:
b. Those acquired through Occupation • Belongs to the spouse: Sums
c. Livestock in excess of what was brought to the collected in partial payments or by
marriage installments during the marriage
d. Those acquired by onerous title during the • Belongs to the conjugal
marriage with Conjugal funds
partnership: Interests falling due
e. Share in Hidden treasure
f. Those obtained from labor, Industry, work or during the marriage on the principal
profession of either or both spouse of both spouses shall pertain to the
g. Those acquired by Chance partnership. (Art. 120)
Accession– if the cost of the improvement and any Rules in Cases of Improvement of Exclusive
resulting increase in value are equal or less than the Property General Rule: The ownership of
value of the entire property at the time of the improvements made on the separate property of
improvement, the entire property remains the exclusive the spouses at the expense of the partnership or
property of the owner-spouse (subject to reimbursement through resulting in increase in value are equall
of improvement cost to the CPG) or less than the value of the entire property at
the time of the improvement, the property
Reverse Accession – if the cost of the improvement and becomes conjugal (subject to reimbursement of
any resulting increase in value are more than the value the value of the property of the owner-spouse)
of the entire property at the time of the improvement, the
property becomes conjugal (subject to reimbursement of
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Charges upon CPG (Art. 121)

Same as that under ACP, except that under taxes and Liquidation of the CPG (Art. 129)
expenses for preservation of separate property of either i. Inventory of all property
spouse during the marriage property need not used by ii. Amounts advanced by CP in payment
the family of personal debts and obligations of
either spouse is credited
NOTE: If the conjugal partnership is insufficient, the iii. Reimbursement for use of exclusive
spouses shall be solidarily liable for the unpaid balance funds
with their separate properties. iv. Debts and obligations of the CP are
The conjugal partnership property shall likewise be liable paid
for the payment of the personal debts of either spouse • In case of insufficiency of assets, the
insofar as they have redounded to the benefit of the spouses shall be solidarily liable for
family. (Art. 121) the unpaid balance with their
separate properties.
Payment of criminal indemnities can be advanced by the
conjugal partnership assets even before these are v. Remains of exclusive properties are
liquidated. It may be enforced against the partnership returned
assets after the responsibilities in Article 121 have been vi. Indemnify loss of deterioration of
covered. No prior liquidation of those assets is required. movables belonging to either spouse
(Pana v. Heirs of Juanite, Sr., G.R. No. 165201, 2012) used for the benefit of the family
vii. Net remainder of conjugal property is
divided equally
Administration and Enjoyment of CPG (Art. 124):
Same as that under ACP • Unless a different proportion is
agreed upon in the marriage
Donation of Conjugal Property (Art. 125): Same as that settlement or there has been a
under ACP voluntary waiver or forfeiture of such
share
Dissolution of the CPG (Art. 126): Same as that under
ACP. viii. Delivery of children’s presumptive
legitimes
An extrajudicial dissolution of the conjugal partnership ix. Adjudication of conjugal dwelling and
without judicial approval is void. A notary public should custody of children
not facilitate the disintegration of a marriage and the • Given to the spouse to whom the majority
family. In so doing, a notary public may be held
of the common children
accountable administratively. (Rodolfo Espinoso v. Juliet
Omana, A.C. 9081, 2011)
ABSOLUTE COMMUNITY OF PROPERTY CONJUGAL PARTNERSHIP OF GAINS

WHAT IT CONSISTS OF
All the properties owned by the spouses at the time of 1. Fruits of conjugal property due or received
marriage become community property (Art. 91) during the marriage and net fruits of separate
property
2. Those acquired through Occupation
3. Livestock in excess of what was brought to the
marriage
4. Those acquired during the marriage with
Conjugal funds
5. Share in Hidden treasure
6. Those obtained from labor, Industry, work or
profession of either or both spouse
7. Those acquired by Chance (Art. 117)
8. The ownership of improvements made on the
separate property of the spouses at the
expense of the partnership or through efforts of
both spouses shall pertain to the partnership
(Art. 120)
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WHAT REMAINS AS EXCLUSIVE PROPERTY
1. Property acquired before the marriage by either 1. That brought into the marriage as his/her own
spouse who has legitimate descendants by a former 2. That acquired during the marriage gratuitously
marriage and its fruits and income 3. That acquired by redemption, barter or
2. Property for personal and exclusive use, except exchange with exclusive property
jewelry 4. That purchased with exclusive money (Art. 109)
3. Property acquired during the marriage by gratuitous
title plus its fruits and income, except when the
donor, testator, or grantor expressly provides
otherwise (Art. 92)
PRESUMPTION
Property acquired during the marriage is presumed to All property acquired during the marriage, whether
belong to the community, unless it is proved that it is the acquisition appears to have been made,
one of those excluded therefrom (Art. 93) contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the
contrary is proved (Art. 116)
CHARGES AND OBLIGATIONS
1. Debts and obligations contracted during the 1. The support of the spouse, their common
marriage: children, and the legitimate children of either
• By either spouse without the consent of the spouse
other to the extent that it benefited the family 2. All debts and obligations contracted during the
• By designated administrator-spouse By both marriage by the designated administrator
spouses spouse for the benefit of the conjugal
• By one with the consent of the other partnership of gains, or by both spouses or by
one of them with the consent of the other
2. Taxes, liens, charges and expenses including 3. Debts and obligations contracted by either
major or minor repairs, upon community property spouse without the consent of the other to the
3. Support of spouses, their common children and extent that the family may have benefited
legitimate children of either spouse 4. All taxes, liens, charges, and expenses,
4. Expenses of litigation between spouses unless the including major or minor repairs upon the
suit is found to be groundless conjugal partnership property
5. Ante-nuptial debts which redounded to the benefit 5. All taxes and expenses for mere preservation
of the family made during the marriage upon the separate
6. Taxes and expenses for mere preservation made property of either spouse
during the marriage upon the separate property of 6. Expenses to enable either spouse to
either spouse used by the family commence or complete a professional,
7. Expenses for professional or vocational course vocational, or other activity for self improvement
8. Other ante-nuptial debts, support of illegitimate 7. Ante-nuptial debts of either spouse insofar as
child, and liabilities for crime or quasi delicts in they have redounded to the benefit of the family
absence of separate property are chargeable 8. The value of what is donated or promised by
against the separate properties of the spouses but both spouses in favor of their common
may be the advanced by the ACP in case of legitimate children for the exclusive purpose of
absence or insufficiency of the exclusive property commencing or completing a professional or
of the debtor-spouse vocational course or other activity for self
9. Donated or promised to common legitimate improvement
children for profession, vocational course or self- 9. Expenses of litigation between the spouses
improvement (Art. 94) unless the suit is found to be groundless (Art.
11)
LIQUIDATION
1. Inventory of all properties 1. Inventory of all property

• Inventory of community property 2. Amounts advanced by CP as payment for
• Inventory of separate property of the wife personal debts and obligations of either spouse
• Inventory of separate property of the are credited
husband 3. Reimbursement for use of exclusive funds
2. Debts and obligations of ACP are paid 4. Debts and obligations of the CP are paid
3. Remainder of the separate properties of the 5. Remains of exclusive properties are returned
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spouses are returned to the owner 6. Indemnify loss of deterioration of movables

4. Net remainder of the ACP is divided equally belonging to either spouse used for the benefit
between husband and wife of the family
5. Presumptive legitimes of children are delivered 7. Net remainder of conjugal property is divided
6. Adjudication of conjugal dwelling and custody of equally
common children (Art. 102) 8. Delivery of children’s presumptive legitimes
9. Adjudication of conjugal dwelling and custody of
children (Art. 129)
b. Own all earnings from his or her own

5. SEPARATION OF PROPERTY AND profession, business or industry
ADMINISTRATION OF COMMON c. Own all fruits, natural, industrial or civil,
PROPERTY BY ONE SPOUSE DURING due or received during the marriage
THE MARRIAGE from his or her
General rule: The administration and enjoyment of the Both spouses shall bear the family
conjugal partnership shall belong to both spouses jointly expenses in proportion to their income, or,
in case of insufficiency or default thereof, to
Exception: In case of disagreement, the husband’s the current market value of their separate
properties. The liability of the spouses to
decision shall prevail subject to recourse by the wife in
creditors for family expenses shall be
court to be availed within 5 years from the date of the
solidary. (Art. 146)
contract implementing the husband’s decision
Grounds for Transfer of Administration of
In case of incapacity of one spouse or inability to Exclusive Property of Either Spouse (GACA)
administer the common properties: (Art. 142)
• The other spouse may assume sole powers of a. One spouse becomes Guardian of
administration, except powers of disposition and the other
encumbrance which requires authority from the b. One spouse is judicially declared
court or written consent of the other spouse Absent
• In the absence of such authority or consent, the c. One spouse is sentenced to
disposition or encumbrance shall be void penalty with Civil interdiction
o However, the transaction shall be d. One spouse becomes a fugitive
construed as a continuing offer on the from justice or is hiding as an
part of the consenting spouse and the Accused in a criminal case
third person, and may be perfected as a
binding contract upon the acceptance If the other spouse is not qualified by reason of
by the other spouse or authorization of incompetence, conflict of interest, or any other
the court before the offer is withdrawn just cause, the court shall appoint a suitable
by either or both offerors. person to be the administrator.
6. REGIME OF SEPARATION OF JUDICIAL SEPARATION OF PROPERTY

PROPERTY
When applicable: In case of a judicial order,
When applicable: If provided under the marriage which may either be voluntary or for sufficient
settlement (Art. 134) cause. (Art. 134)
Properties Included Voluntary separation (Art. 136)

The parties may agree on the extent of their separation The spouses may jointly file a verified petition
of property regime. It may involve present or future with the court.
property or both. It may be total or partial. If it is partial,
the property not agreed upon as separate shall pertain All creditors of the absolute community or of the
to the absolute community (Art. 144) conjugal partnership of gains, as well as the
personal creditors of the spouse, shall be listed
Rights and Liabilities of the Spouses in the petition and notified of the filing thereof.
Each spouse shall: The court shall take measures to protect the
a. Own, dispose of, possess, administer and enjoy creditors and other persons with pecuniary
his or her own separate estate, without need of interest.
the consent of the other
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Sufficient cause for judicial separation (Art. 135): administration in the marriage
a. That the spouse of the petitioner has been settlements has abused that power
sentenced to a penalty which carries with it civil f. That at the time of the petition, the
interdiction spouses have been separated in fact
b. That the spouse of the petitioner has been for at least one year and reconciliation
judicially declared an absentee is highly improbable
c. That loss of parental authority of the spouse of
petitioner has been decreed by the court In the cases provided for in letters (a), (b) and
d. That the spouse of the petitioner has abandoned (c), the presentation of the final judgment
the latter or failed to comply with his or her against the guilty or absent spouse shall be
obligations to the family as provided for in Article enough basis for the grant of the decree of
101 judicial separation of property.
e. That the spouse granted the power of
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7. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE
ARTICLE 147 ARTICLE 148

Applicability A. To a man and woman who are: A. To a man and woman who are:
1.Capacitated to marry each other: 1. Not capacitated to marry each other

(under 18 years old)
a. At least 18 years old 2. Live exclusively with each other as
b. Not falling under Article 37 husband and wife
(incestuous void marriage) 3. Without the benefit of marriage
c. Not falling under Art. 38
(void marriage by reason B. Adulterous relationship (e.g.
of public policy) concubinage)
d. Not bigamous
C. Bigamous or polygamous marriage (Art.
35(4))
2. Live exclusively with each other
as husband and wife D. Incestuous marriages under Art. 37
3. Without the benefit of marriage E. Void marriages by reason of public policy

under Art. 38
B. Other void marriages/live-in
Note: If capacitated, but relationship is NOT
exclusive, it will fall under this provision
Salaries and Owned by parties in equal shares Exclusively owned, and if any of the spouses is
Wages married, his legitimate marriage
Properties Remains exclusive provided that there Remains exclusive
acquired is proof that it was acquired by
through exclusive funds
exclusive funds
Property Presumed to have been obtained by Only the properties acquired by both parties
acquired while their joint efforts, work or industry and through their actual joint contribution of money,
living together shall be owned by them in equal property, or industry shall be owned by them in
shares common in proportion to their respective
contributions. (Art. 148)
If a party did not participate in the
acquisition—shall be deemed to have Without proof of actual contribution by both
contributed jointly if efforts consisted parties, there can be no presumption of co-
in the care and maintenance of the ownership and equal sharing. (Villanueva v. CA,
family and the household G.R. No. 143286)
Once proof of actual contribution is shown, their

contributions and corresponding shares are
presumed to be equal, in the absence of proof to
the contrary. The same rule and presumption
shall apply to joint deposits of money and
evidences of credit. (Art. 148)
Encumberance Neither party can encumber or -

or Disposal of dispose by acts inter vivos of his/her
his/her share share in the property acquired during
cohabitation and owned in common,
without the consent of the other, until
after the termination of their
cohabitation
Forfeiture When only one of the parties to a void If one of the parties is validly married to another,
marriage is in good faith, the share of his or her share in the co-ownership shall accrue
the party in bad faith in the co- to the absolute community or conjugal
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ownership shall be forfeited in favor of partnership existing in such valid marriage.

their common children, descendants,
or innocent party. If the party who acted in bad faith is not validly
• In case of default of or waiver married to another, his or her share shall be
by any or all of the common forfeited in favor of their common children,
children or their descendants, descendants, or innocent party. The share shall
each vacant share shall be forfeited in the same manner as in Art. 147.
belong to the respective
surviving descendants. Rules on forfeiture of shares will apply even if
• In the absence of both are in bad faith.
descendants, such share
shall belong to the innocent
party.
In all cases, the forfeiture shall take

place upon termination of the
cohabitation
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The registration of a property in the name of the

paramour who had no income whatsoever at the F. FAMILY HOME (NOTE: THIS
time of the donation by another’s husband is
tantamount to a donation which is void under SECTION INCLUDES THE WHOLE
Article 87 of the Family Code. The paramour then DISCUSSION ON FAMILY)
holds the property under a constructive trust under
Article 1456 in favor of the conjugal partnership of 1. FAMILY (ART. 149)
the husband with the legitimate spouse (Joaquino
v. Reyes, G.R. No. 154645, 2004). CONCEPT OF FAMILY
Under Art. 147, property acquired by both spouses Basic social institution which public policy
through their work and industry shall be governed cherishes and protects.
by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed
to have been obtained through their joint efforts. Family Relations
Here, the former spouses both agreed that they a. Between husband and wife
acquired the subject property during the b. Between parents and children
subsistence of their marriage. Thus, it shall be c. Among other ascendants and
presumed to have been obtained by their joint descendants
efforts, work or industry, and shall be jointly owned d. Among brothers and sisters, full or half
by them in equal shares (Barrido v. Nonato, 2014). blood. (Art. 150)
Under Article 148, there must be proof of actual A. Effects On Legal Disputes
joint contribution by both the live-in partners before
the property becomes co-owned by them in Suit Between Family Members (Art. 151)
proportion to their contribution. Otherwise, there General Rule: No suit between members of the
are no presumptions of co-ownership and equal same family shall prosper unless it should appear
sharing. (Villanueva v. CA, G.R. No. 143286, from the verified complaint or petition that earnest
2004, reiterated in Ventura v. Sps. Paulino, G.R. efforts toward a compromise have been made, but
No. 202932, 2013) that the same have failed. If it is shown that no
such efforts were in fact made, the same case
No co-ownership exists between parties to an must be dismissed.
adulterous relationship. In such a relationship, it is Exception: These rules shall not apply to cases
necessary for each of the partners to prove his or which may not be the subject of compromise
her actual contribution to the acquisition of under the Civil Code.
property in order to lay claim to any portion of it.
Presumptions of co-ownership and equal Allegation of “earnest efforts” is jurisdictional: if it
contribution do not apply. (Rivera v. Heirs of is absent, the court can dismiss the case.
Villanueva, G.R. No. 141501, 2006) BUT this rule is inapplicable in the following
cases: (CLV FJF)
Art. 148 of the Family Code provides that only the
property acquired by both of the parties through a. Civil status of persons
their actual joint contribution of money, property, b. Any ground for Legal separation
or industry shall be owned in common and in c. Validity of marriage or legal separation
proportion to their respective contributions. Such d. Future support
contributions and corresponding shares were e. Jurisdiction of courts
prima facie presumed to be equal. However, for f. Future legitime (Art. 2035, Civil Code)
this presumption to arise, proof of actual
contribution was required. Petitioner failed to
Spouses Jointly Sued
prove that she made an actual contribution to
The husband and wife shall sue or be sued jointly
purchase the condominium unit. (Soledad L.
except as provided by law. (Section 4, Rule 3 of
Lavadia v. Heirs of Juan Luces Luna G.R. No.
the 1997 Rules of Civil Procedure)
171914 2015)
The term “jointly” means that the spouses shall be
sued together and it does not refer to the nature of
the civil liability. This is so because when the
spouses are sued for the enforcement of an
obligation entered into by them or of an obligation
which redounded to the benefit of the family, they
are being impleaded in their capacity as
representatives of the absolute community or the
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conjugal partnership and not as independent forced sale or attachment provided the following
debtors such that the concept of joint or solidary conditions obtain:
liability, as between them, does not arise (Alipio v. 1. The actual value of the property at the
CA, G.R. No. 134100) time of its constitution does not exceed
Php 300,000 in urban areas and Php
The necessity of being jointly sued is also because 200,000 in rural areas under Art. 157;
generally the spouses are joint administrators of and
either the absolute community property or the 2. The improvement does not result in an
conjugal partnership of gains. However, if what is increase in its value exceeding the
involved in the litigation is his or her separate and statutory limit.
exclusive property, the spouse may appear along
in court (Art. 111). Otherwise, the family home can be the subject of
a forced sale, and any amount above the statutory
2. FAMILY HOME limit is applicable to the obligations under Art. 160.
To warrant the execution sale of a family home
Family Home (Art. 152) under Art. 160, the following facts should be
The dwelling house where they (husband and wife established:
or an unmarried head of the family) and their family
reside, and the land on which it is situated. 1. There was an increase in its actual value;
2. The increase resulted from voluntary
Constitution of a Family House (FH): improvements on the property introduced
i. Jointly by the husband and wife or by an by the persons constituting the family
unmarried head of a family home, its owners or any of its
ii. From the time it is occupied as a family beneficiaries; and
residence so long as any of its 3. The increased actual value exceeded the
beneficiaries actually reside therein (Art. maximum allowable under Article 157.
153) (Eulogio v. Bell, G.R. No. 186322, 2015)
Exempt from Execution (Art. 153)

Other Rules:
General Rule: The FH is exempted from:
a. FH must be owned by person
a. Execution
constituting it
b. Forced sale
b. FH must be permanent
• The right to exemption from forced sale
c. FH continues despite death of one or
is a personal privilege granted to the
more spouses or unmarried head of
the family for 10 years or as long as judgment debtor which must be
there is a minor beneficiary (Art. 159) asserted before the public auction.
d. Only one FH can be constituted Failure to do so would estop the party
Beneficiaries of a Family Home from later claiming on the exemption. It
is a right that can be waived or be
a. Husband and wife, or unmarried head
barred by laches by failure to set up
of the family
and prove the status of the property as
b. Parents (may include parent-in-laws)
a family home at the time of levy. (De
c. Ascendants Mesa v. Acero, G.R. No. 185064,
d. Descendants 2012)
e. Brothers and sisters c. Attachment
(legitimate/illegitimate) living in the
family home and dependent on head Exceptions: (Art. 155)
of family for support. (Art. 154) a. Non-payment of taxes
b. Debts incurred prior to constitution of
Qualified Property home
Actual value of the family home shall not exceed, c. Debts secured by mortgages on the
at the time of its constitution, P300,000 in urban premises
areas and P200,000 in rural areas. (Art.157) d. Debts due laborers, mechanics,
architects, builders, materialmen, and
Rules regarding Subsequent Improvements of others who have rendered service or
Family Home furnished materials for the construction of
Any subsequent improvement of the family home the building
by the persons constituting it, its owners, or any of
its beneficiaries will still be exempt from execution, NOTE: The exemption is limited to the value
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allowed by the Family Code. This also includes children who are:
a. Conceived as a result of artificial
Sale, Alienation, Donation, Assignment, or insemination
Encumbrance of the Family Home (Art. 158) b. Conceived or born of a voidable marriage
a. The person who constituted the same before decree of annulment;
c. Conceived or born before judgment of
must give his/her written consent.
absolute nullity under Art. 36
b. The spouse of the person who constituted (psychological incapacity) becomes final
the family home must also give his/her and executory;
written consent. d. Conceived or born of a subsequent
c. A majority of the beneficiaries of legal age marriage under Art. 53 (failure to record
must also give their written consent. the judgment, partition and distribution of
d. In case of conflict, the court shall decide. properties, and delivery of children’s
presumptive legitime);
e. Legally adopted; and
Requisites for Creditor to Avail of The Right to
f. Legitimated, conceived and born outside
Execute: (Art. 160) of wedlock of parents without impediment
1. He must be a judgment creditor; at the time of conception and who
2. His claim is not among those excepted subsequently married
under Art. 155; and
3. He has reasonable grounds to believe A child born inside a valid marriage is legitimate.
that the family home is worth more than Hence a child born inside a bigamous marriage,
the maximum amount fixed in (Art. 157) which is void, is considered a child under the first
marriage, which has not been nullified or annulled,
Procedure: unless the husband timely impugns the legitimacy
a. Creditor must file a motion in the court of the child. (Concepcion v. CA, G.R. No. 123450,
proceeding where he seeks to obtain a 2005)
writ of execution against the FH.
b. Hearing on the motion where the creditor An agreement by parties as to the status of a child
must prove that the actual value of the is void. Only the law determines legitimacy or
FH exceeds the maximum amount fixed illegitimacy. Thus, the child, in the eyes of the law,
by the Family Code, either at the time of is legitimate under the first marriage
its constitution or as a result of notwithstanding the admission in pleadings by the
improvements introduced thereafter. wife and her second husband that the child is their
c. If creditor proves that the actual value legitimate son. Similarly, any declaration of the
exceeds the maximum amount, the court mother that her child is illegitimate has no
will order its sale in execution. probative value. (Concepcion v. CA, G.R. No.
d. If FH is sold for more than the value 123450, 2005)
allowed, the proceeds shall be applied as
follows: Requisites for Children by Artificial
• First, the obligations enumerated in Insemination to be Considered Legitimate
Art. 155 must be paid (listed above) 1. The artificial insemination must be made
• Then the judgment in favor of the on the wife;
creditor will be paid, plus all the costs 2. Either the sperm of the husband or a third
of execution party donor may be used;
• The excess, if any, shall be delivered 3. The artificial insemination has been
to the judgment debtor. authorized or ratified by both spouses on
a written instrument executed and signed
G. PATERNITY AND FILIATION by them before the birth of the child; and
4. The written instrument is recorded in civil
The filiation of children may be by nature or by registry together with the birth certificate
adoption. Natural filiation may be legitimate or of the child (Art. 164, par. 2)
illegitimate (Art. 163)
2. PROOF OF FILIATION
1. LEGITIMATE CHILDREN
General Rule: Filiation of legitimate or illegitimate
Those conceived or born during a valid children is established by any of the following (Art.
marriage. (Art. 164). 172, par. 1):
a. The record of birth appearing in the civil
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register or a final judgment (Jison v. CA, G.R. No. 124853, 1998)
A certificate of live birth purportedly b. Any other means allowed by the Rules of
identifying the putative father is not Court and special laws
competent evidence of paternity when
there is no showing that the putative c. The due recognition of an illegitimate
father had a hand in the preparation of child in a record of birth
said certificate. The local civil registrar
has no authority to record the paternity of A will, a statement before a court of
record, or in any authentic writing is, in
an illegitimate child on the information of
itself, a consummated act of
a third person. (Cabatania v. CA, G.R.
acknowledgement of the child, and no
No. 124814, 2004) further court action is required. In fact,
any authentic writing is treated not just a
It is well settled that a record of birth is ground for compulsory recognition; it is in
merely a prima facie evidence of the facts itself a voluntary recognition that does
contained therein. It is not conclusive not require a separate action for judicial
evidence of the truthfulness of the approval. (Eceta v Eceta G.R. No.
statements made by the interested 157037, 2004).
parties. (Benitez Badua v. CA, G.R. No.
105625, 1994) The father’s SSS Form E-1 satisfies the
requirement for proof of filiation and relationship of
b. An admission of legitimate or illegitimate petitioner to the Aguilar spouses under Article 172
filiation in a public document or a private of the Family Code. Filiation may be proved by an
handwritten instrument and signed by the admission of legitimate filiation in a public
parent concerned. document or a private handwritten instrument and
signed by the parent concerned, and such due
Exception: In the absence of these pieces of recognition in any authentic writing is, in itself, a
evidence, the legitimate filiation may be proved consummated act of acknowledgment of the child,
by (Art. 172, par. 2): and no further court action is required. (Aguilar v.
a. Open and continuous possession of the Siasat, G.R. 200169, 2015)
status of a legitimate (or illegitimate) child
A thumb mark has been repeatedly considered a
“Continuous” does not mean that the valid mode of signature. Thus, the document
possession of status shall continue executed by the putative father evidencing his
voluntary recognition of filiation is valid. (San
forever but only that it shall not be of an
Agustin v. Sales, G.R. No. 189289, 2016)
intermittent character while it continues.
The possession of such status means Rules in Filing an Action (Art. 173 in relation to
that the father has treated the child as his 175):
own, directly and not through others, General rule: Only the child can bring an action to
spontaneously and without concealment claim legitimacy/illegitimacy:
though without publicity. (Mendoza v. CA, General rule: It must be filed during his
G.R. No. 86302, 1991) or her lifetime
Exception: For illegitimate children,
when the action is based on par. 2 of
There must be evidence of the
Art. 172, the action may be brought
manifestation of the permanent intention
ONLY during the lifetime of the alleged
of the supposed father to consider the
parent (Ara v. Pizzaro, G.R. No.
child as his, by continuous and clear
1872773; J. Leonen).
manifestations of parental affection and Exception: The right may be transmitted to the
care, which cannot be attributed to pure heirs of the child in the following cases:
charity. Such acts must be of such a a. Death during minority;
nature that they reveal not only the b. Insanity; or
conviction of paternity, but also the c. When the action has already been
apparent desire to have and treat the instituted by the child
child as such in all relations in society and
NOTE: Under a & b, the heirs shall have a period
in life, not accidentally, but continuously. of 5 years within which to institute the action.
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Periods for Filing of Action to Impugn

3. ILLEGITIMATE CHILDREN Legitimacy
a. If the husband (or his heirs, in proper cases)
Those conceived AND born outside a valid resides in the same city or municipality
marriage. (Art. 165) where the birth took place or was recorded:
These include those who are: within 1 year
a. Born of marriages which are void ab initio b. If the husband (or his heirs) does not
such as bigamous and incestuous reside in the city or municipality where the
marriages and void marriages by reason child’s birth took place or was recorded but
of public policy his residence is in the Philippines: within
b. Conceived and born of voidable 2 years.
marriages after the decree of annulment c. If the child’s birth took place or was
c. Conceived and born out of wedlock recorded in the Philippines while the
husband has his residence abroad, or
ACTION TO IMPUGN LEGITIMACY vice-versa: within 3 years. (Art. 170)
Grounds to Impugn the Legitimacy of the Child NOTE: The period shall be counted from the
(Art. 166) (Exclusive List) (PBA) knowledge of the child’s birth OR its recording in
a. It was Physically impossible for the the civil register. However, if the child’s birth was
husband to have sexual intercourse with concealed from or was unknown to the husband or
his wife within the first 120 days of the his heirs, the period shall be counted from the
300 days which immediately preceded discovery or knowledge of the birth of the child or
the birth of the child because of: of the fact of registration of said birth, whichever is
i. Physical incapacity of the husband to
earlier.
have sexual intercourse with his wife
ii. Fact that the husband and wife were
living separately in such a way that Presumption on the Status of a Child in Case
sexual intercourse was not possible, of Successive (Valid) Marriages (Art. 168) In the
or absence of proof to the contrary:
iii. Serious illness of the husband which a. Presumed to have been conceived during
absolutely prevented intercourse
the first marriage: If the child was born
b. If it’s proved that for Biological or other before 180 days after celebration of 2nd
scientific reasons, the child could not marriage provided it be born within 300
have been that of the husband, except in days after the termination of the 1st
the case of children conceived through marriage.
artificial insemination
c. In case of children conceived through b. Presumed to have been conceived during
Artificial insemination, when the written the second marriage: If the child was
authorization or ratification of either born after 180 days following the
parent was obtained through mistake, celebration of the 2nd marriage, even
fraud, violence, intimidation, or undue though it be born within 300 days after
influence. (Note: This assumes that there
termination of 1st marriage.
was written authorization)
c. No presumption: If the child was born
Who may impugn the Legitimacy of a Child after 300 days following the termination
General Rule: Only the husband can impugn the of the first marriage. In such a case, the
legitimacy of a child legitimacy or illegitimacy of the child shall
be proved by whoever alleges such (Art.
Exceptions: The heirs of the husband may 169)
impugn the child’s filiation in the following cases:
(Art. 171)
a) If the husband dies before the expiration of
period for filing the action
b) If the husband dies after filing without
desisting
c) If the child was born after the death of the
husband
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SUMMARY OF FILIATION
LEGITIMATE ILLEGITIMATE LEGITIMATED
Those Those For a child to
conceived or conceived AND be
born during a born outside a considered
valid marriage valid marriage legitimated,
(Art. 164) (Art. 165) the following
These include requisites
children who These children must be met:
are: include those (Art. 177)
who are:
a.Conceived a. The child
as a result of a. Born of was conceived
artificial marriages and born out of
4. LEGITIMATED CHILDREN insemination, which are void wedlock
provided ab initio such
Requisites for Legitimation: (Art. 177-178) written as bigamous b. The parents,
authorization and incestuous at the time of
1. The child was conceived and born out of or ratification marriages and child’s
wedlock; is given by the void marriages conception,
2. The parents, at the time of child’s spouses by reason of were not
conception, were not disqualified by any before the public policy disqualified by
impediment to marry each other or were birth of the any
disqualified only because either or both child b. Conceived impediment to
of them were below 18; and and born of marry each
3. There is a valid marriage subsequent to b.Conceived voidable other or were
or born of a marriages after disqualified
the child’s birth. voidable the decree of only because
marriage annulment either or both
NOTE: Legitimation takes place by the before decree of them were
subsequent marriage of the child’s parents. of annulment c. Conceived below 18
Annulment of a voidable marriage shall not affect and born out of
the legitimation c. Conceived wedlock c. There is a
or born before valid marriage
Effect of Legitimation (Art. 179 – 181) judgment of subsequent to
absolute the child’s birth
a. Confers on the child the rights of legitimate nullity under
children Art. 36 Legitimation
b. Retroacts to the time of the child’s birth (psychological takes place by
c. The legitimation of children who died incapacity) the
before the celebration of the marriage shall becomes final subsequent
benefit their descendants. & executory marriage of the
child’s
d.Conceived
Legitimation may be impugned only by those who parents.
or born of a
are prejudiced in their rights within 5 years from subsequent
the time the cause of action accrues. (Art. 182) marriage
under Art. 53
NOTE: Parents need not die for the cause of (failure to
action to accrue record the
judgment,
partition and
distribution of
properties,
and delivery
of children’s
presumptive
legitime)
e.Legally
adopted
f.Legitimated,
conceived
and born
outside of
wedlock of
parents
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without shall be
impediment at answerable,
the time of provided that
conception
in case the
and who
subsequently
obligor has no
married separate
property, the
RIGHTS OF LEGITIMATE/LEGITIMATED VIS-À- absolute
VIS ILLEGITIMATE CHILDREN community or
the conjugal
RIGHTS OF RIGHTS OF partnership, if
LEGITIMATE ILLEGITIMATE financially
CHILDREN CHILDREN capable, shall
(ART. 174) (ART. 176) advance the
Surname Bear the Use of support,
surnames of surname of which shall be
the father the mother, deducted
and mother and has no from the
right to use share of the
the surname spouse
of the father obliged upon
the liquidation
Exception: of ACP or
They may be CPG
allowed to use Successional Preferential Preferential
the surname Rights successional successional
of their father rights in both rights in both
only if there is intestate and intestate and
primary compulsory compulsory
evidence of succession succession
such
illegitimate a. Use the surname of the mother if the
filiation requisites of R.A. 9255 are not complied
between them with
but without b. Use the surname of the father if the child’s
need of
filiation has been expressly recognized by
establishing
such filiation the father, either through:
in a judicial • Record of birth in civil register
proceeding. In • Father’s admission in public
such case, document
the father • Father’s admission in private
during his handwritten document
lifetime, may
institute an
action to
prove non-
filiation.
Support Has the right Has right to
to receive receive
support from support from
their parents, both parents
their but only the
ascendants, separate
and in proper property of
cases, their the person
brothers and obliged to
sisters give support
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H. ADOPTION 3. One who is married to a Filipino citizen and

seeks to adopt jointly with his/her spouse
Note that RA 8552 and RA 9523 were repealed, a relative within the 4th degree of
and RA 8043 amended, by RA 11642, which took consanguinity or affinity of the Filipino
effect on January 28. 2022 (beyond the cut-off spouse
date for the 2022 Bar).
c. Guardians
With respect to the ward after the termination of
1. DOMESTIC ADOPTION (R.A. No.
the guardianship and clearance of his/her financial
8552) accountabilities.
a. Who May Adopt All statutory requirements for adoption must be

met, and when a court issues an adoption decree
a. A Filipino citizen of: despite the fact that all the said requirements are
1. Legal age; not met, such decree is a nullity (In re O’Keefe,
2. In possession of full civil capacity and legal 164 Misc 473).
rights;
3. Good moral character Rule on Adoption by Spouses:
4. Has not been convicted of any crime General Rule: Husband and wife shall
involving moral turpitude; jointly adopt.
5. Emotionally and psychologically capable
of caring for children; Exceptions:
6. In a position to support and care for his 1. One spouse seeks to adopt the legitimate
legitimate and illegitimate children, in son/daughter of the other;
keeping with the means of the family and; 2. One spouse seeks to adopt his/her own
7. At least 16 years older than the person to illegitimate son/daughter. This is provided
be adopted, unless the adopter is: that the other spouse has signified his/her
i. The natural parent of the child to be consent; or
adopted, or 3. The spouses are legally separated from
ii. The spouse of the legitimate parent of each other
the person to be adopted (Sec. 7, R.A.
8552) NOTE: In case husband and wife jointly adopt, or
one spouse adopts an illegitimate child of the
b. Alien other, then joint parental authority shall be
1. Possessing the same qualifications as exercised
above stated for Filipino nationals;
2. His/her country has diplomatic relations The law requires that for adoption to be valid, the
with the Philippines; spouse seeking to adopt must first obtain the
3. He/she has been living in the Philippines consent of his or her spouse and the consent of
for at least 3 continuous years prior to the the adopter’s children 10 years old and above. To
filing of the application for adoption and secure this, personal service of summons should
maintains such residence until the have been effected on the spouse and all
adoption decree is entered; legitimate children to ensure that their substantive
4. He/she has been certified by his/her rights are protected. It is not enough to rely on
diplomatic or consular office or any constructive notice as in this case. Surreptitious
appropriate government agency that use of procedural technicalities cannot be
he/she has the legal capacity to adopt in privileged over substantive statutory rights (Castro
his/her country; v. Gregorio, G.R. No. 188801).
5. His/her government allows the adoptee to
enter his/her country as his/her adopted b. Who May be Adopted
son/daughter
Who May be Adopted (BAILORP)
Requirements for No. 3 and 4 may be waived in a. Any person Below 18 years of age who
the following instances: has been administratively or judicially
1. A former Filipino citizen who seeks to declared available for adoption
adopt a relative within the 4th degree of b. Under R.A. 9523, a child which can be
consanguinity or affinity; or certified as “legally Available for adoption”
2. One who seeks to adopt the legitimate includes a person below eighteen (18)
child of his/her Filipino spouse; or
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years of age or a person over eighteen be unfair and unconscionable (Tamargo v. CA,
(18) years of age but is unable to fully take G.R. No. 85044).
care of him/herself or protect him/herself
from abuse, neglect, cruelty, exploitation, c. Rights of an adopted child
or discrimination because of physical or
mental disability or condition Effects of Adoption:
c. Illegitimate son/daughter by a qualified a. Sever all legal ties between the biological
adopter to improve his/her status to that of parent(s) and the adoptee, except when
legitimacy the biological parent is the spouse of the
d. Legitimate son/daughter of one spouse by adopter;
the other spouse b. Deem the adoptee as a legitimate child of
e. Person of legal age if, prior to the adoption, the adopter; and
said person has been consistently c. Give adopter and adoptee reciprocal rights
considered and treated by the adopter as and obligations arising from the
his/her Own child since minority; relationship of parent and child, including
f. Child whose adoption has been previously but not limited to:
Rescinded 1. The right of the adopter to choose
g. Child whose biological or adoptive Parents the name the child is to be known;
have died provided that no proceedings and
shall be initiated within 6 months from the 2. The right of the adopter and
time of death of said parents adoptee to be legal and compulsory
heirs of each other.
NOTE: A “child” refers to a person below eighteen
(18) years of age Therefore, even if emancipation terminates
parental authority, the adoptee is still considered a
Written consent is necessary for adoption legitimate child of the adopter with all the rights of
from the ff: (A-BLISS) a legitimate child such as:
a. Adoptee, if 10 years of age or over; (1) to bear the surname of the father and the
b. Biological parents of the child, if known, or mother;
the legal guardian, or the proper (2) to receive support from their parents; and
government instrumentality which has (3) to be entitled to the legitime and other
legal custody of the child; successional rights (In Re: Petition for
c. Legitimate and adopted children of the Adoption of Michelle P. Lim, Monina P.
adopter and adoptee, 10 years old or over; Lim, G.R. Nos. 168992-93).
d. Illegitimate children of the adopter, 10
years old or over and living with him or her Rules on Succession
e. Spouse of the adopted, if married In legal and intestate succession, the adopters
f. Spouse of the adopter, if married and the adoptee shall have reciprocal rights of
succession without distinction from legitimate
Effectivity of Decree of Adoption filiation. However, if the adoptee and his/her
A decree of adoption is effective as of the date the biological parents had left a will, the law on
original petition was filed. This also applies in case testamentary succession shall govern
the petitioner dies before the issuance of the
decree of adoption d. Instances and Effects of
Rescission
Where the petition for adoption was granted after
the child killed a girl, no retroactive effect may be
Rescission of Adoption
given to the decree of adoption so as to impose a
Who may file: Only the adoptee may file for
liability upon the adopting parents accruing at a
rescission of the adoption decree.
time when the adopting parents had no actual or
● The adopters may disinherit the adoptee
physically custody over the adopted child.
for causes provided in Art. 919 of the NCC
Retroactive effect may perhaps be given where
such is essential to permit the accrual of some
NOTE: If the adoptee is a minor or if over 18 years
benefit or advantage in favor of the adopted child.
old but is incapacitated, he/she must be assisted
To hold that parental authority had been
by the Department of Social Welfare and
retroactively lodged in the adopting parents so as
Development as guardian/counsel
to burden them with liability for a tortious act that
they could not have foreseen nor prevented would
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Grounds for Rescission of Adoption: (MASA) Qualifications and Disqualifications of an

a. Repeated physical and verbal Adopter
Maltreatment by the adopters despite An alien or a Filipino citizen permanently residing
having undergone counseling abroad may file an application for inter-country
b. Attempt on the life of the adoptee adoption of a Filipino child if: (DEBT-CAMPS)
c. Sexual assault or violence a. Comes from a country with whom the
d. Abandonment and failure to comply with Philippines has Diplomatic relations and
parental obligations. whose government maintains a similarly
authorized and accredited agency and
Effects of the Rescission of the Adoption: that adoption is allowed under his/her
a. The parental authority of the adoptee's national laws;
biological parents, if known, OR the legal b. Eligible to adopt under his/her national
custody of the DSWD shall be restored if law;
the adoptee is still a minor or c. Agrees to uphold the Basic rights of the
incapacitated. child as embodied under Philippine laws,
b. The reciprocal rights and obligations of the the U.N. Convention on the Rights of the
adopters and the adoptee to each other Child, and to abide by the rules and
shall be extinguished. regulations issued to implement the
c. The court shall order the Civil Registrar to provisions of this Act;
cancel the amended certificate of birth of d. Has not been convicted of a crime
the adoptee and restore his/her original involving moral Turpitude;
birth certificate. e. Has the Capacity to act and assume all
d. Succession rights shall revert to its status rights and responsibilities of parental
prior to adoption, but only as of the date of authority under his national laws, and has
judgment of judicial rescission. Vested undergone the appropriate counseling
rights acquired prior to judicial rescission from an accredited counselor in his/her
shall be respected. country;
f. At least 27 years of Age and at least 16
2. INTER-COUNTRY ADOPTION (RA years older than the child to be adopted, at
8043) the time of application unless the adopter
is the parent by nature of the child to be
Inter-Country Adoption adopted or the spouse of such parent;
Refers to the socio legal process of adopting a g. If Married, his/her spouse must jointly file
Filipino child by a foreigner or a Filipino citizen for the adoption;
permanently residing abroad where the petition is h. Possesses all the qualifications and none
filed, the supervised trial custody is undertaken, of the disqualifications provided herein and
and the decree of adoption is issued outside the in other applicable Philippine laws; and
Philippines i. In a position to provide the proper care and
Support and to give the necessary moral
NOTE: A “child” refers to a person below fifteen values and example to all his children,
(15) years of age unless sooner emancipated by including the child to be adopted
law
c. Who may be adopted
a. When allowed
Qualifications and Disqualifications of
Inter-Country Adoption: Refers to the socio legal Adopted
process of adopting a Filipino child by a foreigner Who may be adopted: Only a legally free child
or a Filipino citizen permanently residing abroad may be the subject of inter-country adoption
where the petition is filed, the supervised trial
custody is undertaken, and the decree of adoption Legally-free child: A child who has been
is issued outside the Philippines voluntarily or involuntarily committed to the
Department, as dependent, abandoned, or
NOTE: A “child” refers to a person below neglected, in accordance with the Child and Youth
fifteen (15) years of age unless sooner Welfare Code
emancipated by law ● No child shall be matched to a foreign
adoptive family unless it is satisfactorily
shown that the child cannot be adopted
b. Who may adopt
locally
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c. Parents and their Legitimate/Illegitimate

Limitation on Voluntarily Committed Children Children/Grandchildren
General Rule: In the case of a child who is d. Legitimate Brothers and Sisters, whether
voluntarily committed, the physical transfer of said full or half-blood
child shall be made not earlier than 6 months from
the date the Deed of Voluntary Commitment was Rules Regarding Support for Illegitimate
executed by the child’s biological parent/s Brothers and Sisters (Whether Full or Half
Exception: It does not apply to adoption by a Blood)
relative or children with special medical conditions. ● If the one asking for support is below
majority age, he is entitled to support from
IMPORTANT TO NOTE: his illegitimate brother or sister to the full
There are differences between the two adoption extent, without any condition
laws regarding: ● If the one asking for support is of majority
a. Definition of a child age, he is entitled to support only if his need
b. Procedure (where to file, what petition may for support is not due to a cause imputable
include, publication requirements, to his fault or negligence. (Art. 196)
supervised trial custody)
c. Qualifications of adopter Insofar as Philippine laws are concerned,
d. Who may be adopted specifically the provisions of the Family Code
e. Court that issues decree of adoption on support, the same only applies to Filipino
(Family court vs. Foreign court) citizens. Petitioner cannot rely on Article 195 in
demanding support from respondent, who is a
I. SUPPORT foreign citizen. However, in view of
respondent’s failure to prove the national law
1. WHAT IT COMPRISES of the Netherlands, the doctrine of processual
presumption shall govern, which states that if
Support consists of everything indispensable the foreign law involved is not properly
for: (METS-DC) (Art. 194): pleaded and proved, our courts will presume
a. Medical attendance that the foreign law is the same as our local or
b. Education – includes schooling (formal domestic or internal law. Thus, the law in the
education) or training (non-formal Netherlands is presumed to be the same with
education) for some profession, trade or Philippine law, which enforces the obligation of
vocation, even beyond the age of majority parents to support their children and penalizing the
c. Transportation – includes expenses going non-compliance therewith. Moreover, foreign law
to and from school, or to and from place of should not be applied when its application
work (Art. 194) would work undeniable injustice to the citizens
d. Sustenance or residents of the forum. (Norma A. Del
e. Dwelling Socorro, for and in behalf of her minor child,
f. Clothing Roderigo Norjo Van Wilsem v. Ernst Johan
Brinkham Van Wilsem, G.R. No. 193707)
There is no distinction between natural support
(basic necessities) and civil support (those beyond 3. SOURCE OF SUPPORT
the basic necessities)
For the support of spouses, their common
In an action for support, the court can declare a children, and legitimate children of either spouse,
marriage void to determine the rights of the child the absolute community or the conjugal
to be supported. There is no need that a judicial partnership shall be liable (Art. 94(1), Art. 121(1)).
declaration of nullity be filed first before the lower
court can rule that the marriage was void (De For others obliged to give support, the separate
Castro v. Assidao-De Castro, G.R. No. 160172). property of the obligor shall be answerable:
● Provided, that the absolute community or
2. WHO ARE OBLIGED TO GIVE the conjugal partnership shall advance
SUPPORT the support in case the obligor has no
separate property
Persons Obliged to give Support to Each o Under CPG, in case of
Other to the Whole Extent: (SAPL) (Art. 195) insufficiency, the conjugal
a. Spouses partnership shall be liable only
b. Legitimate Ascendants and Descendants after the responsibilities under
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Art. 121 have been covered (Art.

122) 6. MANNER AND TIME OF PAYMENT
● Any advance/s made shall be deducted
from the share of the obligor spouse upon Time of payment (Art. 203):
liquidation of the absolute community or The obligation to give support can be demanded
of the conjugal partnership (Art. 197) from the time the person who has the right to
receive the same needs it for maintenance
4. ORDER OF SUPPORT ● However, it shall be paid only from the
date of judicial or extrajudicial demand
When two or more persons are obliged to give
support, liability shall devolve based on the Payment shall be made within the first five (5) days
following order: of each corresponding month
a. Spouse; ● In case the recipient dies, his heirs shall
b. Descendants in the nearest degree; not be obliged to return what he has
c. Ascendants in the nearest degree; and received in advance
d. Brothers and sisters (Art. 199)
Manner of payment (Art. 204):
Rule in case of multiple obligors with one and Here, the obligor has two options:
the same oblige: 1. To pay the allowance fixed; or
● The payment shall be divided between the 2. To receive and maintain the person who
obligors in proportion to their resources has a right to receive support in the family
(Art. 200(1)) dwelling, unless there is a moral or legal
● In case of urgency or special obstacle
circumstances, the judge may order only
one of them to furnish provisional support 7. RENUNCIATION AND
o Without prejudice to his or her right TERMINATION
of reimbursement from the other/s
(Art. 200(2)) The waiver, renunciation, transmission, or
compensation of the right to receive support
Rule in case of multiple obligees with one and cannot still be undertaken as such acts are
the same obligor: contrary to law, public policy, morals, or good
General Rule: The obligor must satisfy all the customs pursuant to Article 6 of the Civil Code.
claims ● It is in violation of the of the mandatory
Exception: In case the obligor has no sufficient obligation under Article 195 and
means to satisfy all the claims, the order above therefore, if such prescribed acts are
(See: order of support or Art. 199) shall be undertaken, they shall be void pursuant to
followed Article 5 of the Civil Code
● Exception to this: Between the spouse
and a child subject to parental authority, 8. SUPPORT PENDENTE LITE
the child is preferred (Art. 200 (3))
Support shall be given during the proceedings for:
5. AMOUNT OF SUPPORT ● Legal separation
● Annulment of marriage, and
The amount of support shall be in proportion to: ● Declaration of nullity of marriage
● The resources or means of the giver and
● To the necessities of the recipient (Art. Who are entitled to it: Spouses and their children
201) General Rule: As between spouses, the
obligation of mutual support ceases after final
The amount of support shall be reduced or judgement granting the petition.
increased proportionately according to:
● Changes in the necessities of the Exception: This is unless, in case of legal
recipient and separation, the court orders the guilty spouse to
● The resources of the provider (Art. 202) furnish support to the innocent one, specifying the
terms thereof
Source of support: The absolute community or

the conjugal partnership (Art. 198)
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In an action for support, adultery is a good defense the vexation and costs of a protracted pleading of
and if properly proved and sustained, will defeat their cause (Abella v. Cabañero, G.R. No.
the action (Reyes v. Ines-Luciano, G.R. No. L- 206647).
48219). However, while adultery may be a
defense in an action for personal support, that is, Q: Can the Pension Gratuity Management
support of the wife by the husband from his own Center of the AFP (PGMC) be ordered to
funds, it is not a defense when the support is to be automatically deduct a percentage from the
taken from the conjugal partnership property. retirement benefits of its enlisted personnel,
(Lerma v. Court of Appeals, G.R. No. L-33352) and to give the same directly to the latter's
lawful wife as spousal support in compliance
9. PROCEDURE IN APPLICATION with a protection order issued by the RTC
FOR SUPPORT pursuant to RA. No. 9262?
Interlocutory nature of support pendente lite ● YES. We hold that Section 8(g) of RA.
In a Petition for Review under Rule 45, petitioner No. 9262, being a later enactment,
argues that the CA should not have dismissed her should be construed as laying down an
appeal because the arrears in support pendente exception to the general rule that
lite which respondent failed to pay have ceased to retirement benefits are exempt from
be provisional and have become final. execution. It bears stressing that
Section 8(g) providing for spousal
The SC held that it is important to emphasize the and child support, fulfills the
temporary or provisional nature of support objective of restoring the dignity of
pendente lite. It is but an incident to the main women who are victims of domestic
action for declaration of nullity; and whether an violence and provides them
order or resolution is final or interlocutory is not continued protection against threats
dependent on compliance or non-compliance by a to their personal safety and security
party to its directive, questioning the subject (PGMC v. AAA, G.R. No. 201292).
interlocutory orders of the RTC, petitioner's appeal
was correctly dismissed by the CA. J. PARENTAL AUTHORITY
The remedy against an interlocutory order not 1. GENERAL PROVISIONS

subject of an appeal is a special civil action under
Rule 65 provided that the interlocutory order is Parental Authority (patria potestas)
rendered without or in excess of jurisdiction or with The mass of rights and obligations which parents
grave abuse of discretion. Having chosen the have in relation to the person and property of their
wrong remedy in questioning the subject children until their emancipation, and even after,
interlocutory orders of the RTC, petitioner's appeal under certain circumstances
was correctly dismissed by the CA (Calderon v.
Roxas and CA, G.R. No. 185595). Characteristics of Parental Authority:
a. It is a natural right and duty of the parents
X prayed for support from the putative father of her over the person and property of their
child (who is also X’s father). While the grant of unemancipated children (Art. 209);
support was contingent on ascertaining parental b. It cannot be renounced, transferred,
relations between the child and the putative except in cases authorized by law (Art.
parent, it was unnecessary for the action for 210);
support to be dismissed by the appellate court. An c. It is jointly exercised by the father and the
integrated determination of filiation is "entirely mother (Art. 211);
appropriate" to an action for support. Concerned d. It is purely personal and cannot be
parties may be allowed to present evidence to exercised through agents; and
establish their cause of action, inclusive of their e. It is temporary
underlying claim of paternal relations. An action for
support may very well resolve that ineluctable Rules as to the exercise of Parental Authority
issue of paternity if it involves the same parties, is a. The father and the mother shall jointly
brought before a court with the proper jurisdiction, exercise parental authority over the
prays to impel recognition of paternal relations, persons of their common children. In case
and invokes judicial intervention to do so. This also of disagreement, the father's decision shall
serves the interest of judicial economy — avoiding prevail, unless there is a judicial order to
multiplicity of suits and cushioning litigants from the contrary (Art. 211);
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b. If the child is illegitimate, parental authority separated parents. This effectively empowers
is with the mother; separated parents, by the simple expedient of
c. In case of absence or death of either avoiding the courts, to subvert a legislative policy
parent, the parent present shall continue vesting to the separated mother sole custody of
exercising parental authority (Art. 212); her children under seven years of age (Dacasin v.
• The marriage of the surviving Dacasin, G.R. No. 168785)
parent shall not affect parental
authority over the children, unless 2. SUBSTITUTE PARENTAL
the court appoints another person AUTHORITY
to be the guardian of the person or
property of the children Order of Substitute Parental Authority:
d. In case of separation of the parents, In default of parents or a judicially appointed
parental authority shall be exercised by the guardian, substitute parental authority shall be
parent designated by the Court exercised by:
• The Court shall take into account all 1. The surviving grandparent;
relevant considerations, especially 2. The oldest brother or sister over 21 years
the choice of the child over 7 years old, unless unfit or disqualified;
of age, unless the parent chosen is 3. The child’s actual custodian, over 21
unfit years old, unless unfit or disqualified (Art.
• No child under 7 years old shall be 216)
separated from the mother, unless
the Court finds compelling reasons In a custody case where the father of an
to order otherwise illegitimate child was the actual custodian of said
child, the SC ruled that while it may be argued that
Once parental authority is vested, it cannot be Article 176 has effectively disqualified the father
waived except in cases of adoption, guardianship from exercising substitute parental authority under
and surrender to a children’s home or an orphan Article 216, the Court cannot adopt a rigid view,
institution. (Sagala-Eslao v. Court of Appeals, without running afoul to the overarching
G.R. No. 116773) consideration in custody cases, which is the best
interest of the minor. The best interest demands a
It is not enough to show that the biological mother determination if the mother is unfit; and if so,
is a lesbian so that she can be denied the custody whether it is best that custody be with her father
of a child not more than 7 years of age. X must rather than her grandparents upon whom the law
also demonstrate that she carried on her accords a far superior right to exercise substitute
purported relationship which is not conducive to parental authority. (Masbate and Spouses
the child’s proper moral development. In choosing Masbate v. Relucio, G.R. No. 235498)
the parent to whom custody is given, the welfare
of the minor should always be the paramount In case of foundlings, abandoned children,
consideration. The “tender-age presumption” may neglected children, or abused children, and
be overcome only by compelling evidence of the other children similarly situated, summary
mother’s unfitness (Pablo-Gualberto v. Gualberto, judicial proceedings shall be instituted so that
G.R. No. 154994). they may be entrusted to:
a. Heads of children’s homes
The matter of custody is not permanent and b. Orphanages, or
unalterable and can always be re-examined and c. Similar institutions duly accredited by the
adjusted. Custody, even if previously granted by a proper government agency (Art. 217)
competent court in favor of a parent, is not
permanent. The paramount interest of the child 3. SPECIAL PARENTAL AUTHORITY
should always be considered (Beckett v.
Sarmiento, RTJ-12-2326) People Exercising Special Parental Authority:
a. School
A joint agreement that the father shall have b. Administrators and teachers
custody of the child below seven is void for being c. Individual, entity, or institution engaged in
contrary to law. To limit this provision’s childcare
enforceability to court sanctioned agreements
while placing private agreements beyond its reach NOTE: Special parental authority can be
is to sanction a double standard in custody exercised only over minors while under their
regulation of children under seven years old of supervision, instruction, or custody. The authority
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and supervision also attach to all authorized detrimental to their health, studies and
activities whether inside or outside the school, morals
entity, or institution g. To represent them in all matters affecting
their interests
Liability of those Exercising Special Parental h. To demand from them respect and
Authority Over the Child obedience
They are principally and solidarily liable for i. To impose discipline on them as may be
damages caused by the acts or omissions of the required under the circumstances
child while under their supervision, instruction or j. To perform such other duties as are
custody. However, this liability is subject to the imposed by law upon parents and
defense that the person exercising parental guardians (Art. 220)
authority exercised proper diligence. The parents
and judicial guardians of the minor or those The person exercising substitute parental
exercising substitute parental authority over the authority shall have the same authority over
minor are subsidiarily liable for said acts and the person of the child as the parents
omissions of the minor. The responsibility given to
an academic institution for the welfare of its In no case shall the school administrator,
students has been characterized by law and teacher, or individual engaged in childcare and
judicial doctrine as a form of special parental exercising special authority, inflict corporal
authority and responsibility. punishment upon the child (Art. 233)
This responsibility has been amplified by the Liability of Persons Exercising Parental
enactment of the Anti-Hazing Law, in that the Authority
failure by school authorities to take any action to Civilly liable for the injuries and damages caused
prevent the offenses as provided by the law by the acts or omissions of their unemancipated
exposes them to criminal liability as accomplices children living in their company and under their
in the criminal acts. Thus, the institution and its parental authority. This is subject to appropriate
officers cannot stand idly by in the face of patently defenses provided by law (such as the exercise of
criminal acts committed within their sphere of diligence of a good father of a family) (Libi v. IAC,
responsibility. They bear the commensurate duty G.R. No. 70890).
to ensure that the crimes covered by the Anti-
Hazing Law are not committed (People v. 5. EFFECTS OF PARENTAL
Bayabos, G.R. No. 171222). AUTHORITY OVER THE CHILD’S
PROPERTY
4. EFFECT OF PARENTAL
AUTHORITY OVER THE CHILD’S Effect of Parental Authority Upon the Property
PERSON of the Child:
a. The father and mother shall jointly
Parental Rights and Duties: exercise legal guardianship over the
a. To keep them in their company property of the minor common child
b. To support, educate and instruct them by without court appointment
right precept and good example b. In case of disagreement, the father’s
c. To provide for their upbringing in keeping decision shall prevail, unless there is
with their means judicial order to the contrary
d. To give them love and affection, advice c. If the market value of the property or the
and counsel, companionship and annual income of the child exceeds
understanding P50,000, the parent is required to furnish
e. To provide them with moral and spiritual a bond of not less than 10% of the value of
guidance, inculcate in them honesty, the child’s property or income
integrity, self-discipline, self-reliance, d. The property of the unemancipated child
industry and thrift, stimulate their interest earned or acquired with his work or
in civic affairs, and inspire in them industry or by onerous or gratuitous title
compliance with the duties of citizenship shall belong to the child in ownership and
f. To furnish them with good and wholesome shall be devoted exclusively for support
educational materials, supervise their and education, unless the title or transfer
activities, recreation and association with provides otherwise
others, protect them from bad company, • The fruits and income of the child’s
and prevent them from acquiring habits property shall be limited primarily to
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the child’s support and secondarily d. Final judgment divesting parental authority
to the collective daily needs of the e. Judicial declaration of absence or
family incapacity of person exercising parental
authority
The parent’s authority over the estate of the ward
as a legal guardian would not extend to acts of 7. SOLO PARENTS ACT (R.A. No.
encumbrance or disposition, as distinguished from 8972)
acts of management or administration (Nario v.
Philippine American Life Ins. Co., G.R. No. L- Who are solo parents: Any individual falling
22796). under any of the following categories:
a. A woman who gives birth as a result of
A parent has no power to compromise their rape and other crimes against chastity
children’s claims, for a compromise has always even without a final conviction of the
been deemed equivalent to an alienation, and is offender: provided, that the mother keeps
an act of strict ownership that goes beyond mere and raises the child;
administration (Visaya, et al. v. Suiguitan, et al., b. Parent left solo or alone with the
G.R. No. L-8300). responsibility of parenthood:
1. due to death of spouse;
6. SUSPENSION OR TERMINATION 2. while the spouse is detained or is
OF PARENTAL AUTHORITY serving sentence for a criminal
conviction for at least one (1) year;
Grounds for Suspension of Parental 3. due to physical and/or mental
Authority: (CHOBA) incapacity of spouse as certified by
a. Conviction of parent for crime with civil a public medical practitioner;
interdiction (Art. 230) 4. due to legal separation or de facto
b. Treats child with excessive Harshness and separation from spouse for at least
cruelty one (1) year, as long as he/she is
c. Gives corrupting Orders counsel, or entrusted with the custody of the
example children;
d. Compels child to Beg 5. due to declaration of nullity or
e. Subjects to or allows him to be subjected annulment of marriage as decreed
to Acts of lasciviousness (Art. 231) by a court or by a church as long as
he/she is entrusted with the custody
Revival of Suspended Parental Authority of the children;
If under a: The authority is automatically 6. due to abandonment of spouse for
reinstated upon service of the penalty or upon at least one (1) year;
pardon or amnesty of the offender c. Unmarried mother/father who has
preferred to keep and rear her/his
If under b-e: The suspension or deprivation may child/children instead of having others care
be revoked and the parental authority revived in a for them or give them up to a welfare
case filed for the purpose or in the same institution;
proceeding if the court finds that the cause d. Any other person who solely provides
therefore has ceased and will not be repeated parental care and support to a child or
children;
Termination of Parental Authority: e. Any family member who assumes the
a. Death of parents responsibility of head of family as a result
b. Death of child of the death, abandonment,
c. Emancipation of child disappearance or prolonged absence of
d. Parents exercising parental authority has the parents or solo parent.
subjected the child or allowed him to be
subjected to sexual abuse (ground for Provided, that a change in status or circumstance
permanent termination) (Art. 228) of a parent claiming benefits under this Act, such
that he or she is no longer left alone with the
Other Cases Where Parental Authority May Be responsibility of parenthood, shall terminate his or
Terminated (Art. 229) her eligibility for benefits under this Act (Sec. 3(a))
a. Adoption of child
b. Appointment of general guardian
c. Judicial declaration of abandonment
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Comprehensive Package of Social Who are entitled to such rights and benefits
Development and Welfare Services (Sec. 4):
The package to be developed by the departments Any solo parent whose income in the place of
concerned will initially include: domicile falls below the poverty threshold set by
a. Livelihood development services, NEDA and subject to the assessment of the
including trainings on livelihood skills, DSWD worker in the area
basic business management, value
orientation, and provision of seed capital On the other hand, a solo parent whose income is
or job placement above the poverty threshold shall enjoy the
b. Counseling services, including individual, following benefits:
peer group, or family counseling a. Flexible Work Schedule
c. Parent effectiveness service, including b. Freedom from work discrimination
provisions and expansion of knowledge c. Parental Leave
and skills of solo parent on early childhood
development, behavior management, K. EMANCIPATION
health care, rights and duties of parents
and children 1. CAUSE OF EMANCIPATION
d. Critical incidence stress debriefing,
including preventive stress management Emancipation takes place by the attainment of
designed to assist solo parent in coping majority.
with crisis situations and abuse
e. Special projects for individuals in need of Unless otherwise provided, majority commences
protection, including temporary shelter, at the age of eighteen years (Art. 234, as amended
counseling, legal assistance, medical by RA 6809)
care, self-concept or ego-building, crisis
management and spiritual enrichment
2. EFFECT OF EMANCIPATION
(Sec. 5)
Emancipation for any cause shall terminate
Other rights and benefits (Sec. 6-11):
parental authority over the person and property of
a. Flexible Work Schedule: Provided, it
the child who shall then be qualified and
does not affect individual and company
responsible for all acts of civil life, save the
productivity and the employer is not
exceptions established in by existing laws in
granted an exemption by DOLE
special cases.
b. No work discrimination
c. Parental leaves of not more than seven
Contracting marriages shall require parental
(7) working days every year, provided the
consent until the age of twenty-one. (Art. 236)
solo parent employee has rendered
services of at least one year
d. Educational Benefits such as: L. RETROACTIVITY OF FAMILY CODE
1. Scholarship programs for qualified
solo parents and their children in This code shall have retroactive effect insofar as it
institutions of basic, tertiary, and does not prejudice or impair vested or acquired
technical/skills education; and rights in accordance with the Civil Code or other
2. Nonformal education programs laws (Art. 256)
appropriate for solo parents and
children Since the petitioner and the respondent suffer no
e. Housing Benefits: legal impediment and exclusively lived with each
1. Allocation in housing projects other under a void marriage, their property relation
2. Liberal terms of payment on said is one of co-ownership under Article 147 of the
government low-cost housing Family Code. The said provision finds
projects application in this case even if the parties were
married before the Family Code took effect by
NOTE: Priority is given to express provision of the Family Code on its
applicants who are below the retroactive effect for as long as it does not
poverty line as declared by the prejudice or impair vested or acquired rights in
NEDA accordance with the Civil Code or other laws
f. Medical Benefits (Paterno v. Paterno, G.R. No. 213687).
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III. SUCCESSION A. GENERAL PROVISIONS
1. DEFINITION
TOPIC OUTLINE UNDER THE SYLLABUS:
Succession – mode of acquisition by virtue of
A. GENERAL PROVISIONS
which the property, rights and obligations to the
1. Definition
extent of the value of the inheritance, of a person
2. Succession Occurs at the Moment of
are transmitted through his death to another or
Death
others either by his will or by operation of law. (Art.
3. Kinds of Successors
774)
B. TESTAMENTARY SUCCESSION
Kinds of succession
1. Wills
(a) Compulsory — succession to the legitime
2. Institution of heirs
(this prevails over all kinds)
3. Substitution of heirs
(b) Testate — succession by will
4. Conditional testamentary dispositions
(c) Intestate — succession by operation of law;
and testamentary dispositions with a term
occurs in the absence of a valid will
5. Legitime
(d) Mixed — a combination of testate and
6. Disinheritance
intestate succession. (Balane, Jottings and
7. Legacies and devises
Jurisprudence in Civil Law, p. 29, 2016)
C. LEGAL OR INTESTATE SUCCESSION
ELEMENTS OF SUCCESSION
1. General provisions;
a. Relationship
(a) Subjective Element
b. Right of representation
2. Order of intestate succession
(i) Decedent — person whose property is
transmitted through succession (Art.
D. PROVISIONS COMMON TO TESTATE AND
775); also called testator in testate
INTESTATE SUCCESSION
succession.
1. Right of accretion
2. Capacity to succeed by will or intestacy (ii) Successors/Heirs – those who are
3. Acceptance and repudiation of the called to succession to the whole or to an
inheritance aliquot portion of the inheritance either by
4. Partition and distribution of estate will or by operation on law. (Art. 782)
2. SUCCESSION OCCURS AT THE

MOMENT OF DEATH
(b) Causal Element
Death of the Person – The rights to the

succession are transmitted from the moment of the
death of the decedent. (Art. 777)
Thus, the capacity of the heir is determined as of

the time the decedent died (Art. 1034); the legitime
is to be computed as of the same moment (Art.
908), and so is the inofficiousness of the donation
inter vivos (Art. 771). Similarly, the legacies of
credit and remission are valid only in the amount
due and outstanding at the death of the testator
(Art. 935), and the fruits accruing after that are
deemed to pertain to the legatee. (Art. 948;
Calalang-Parulan v. Calalang-Garcia, G.R. No.
184148)
In addition, the law in force at the time of the

decedent’s death will determine who the heirs
should be [Uson v. Del Rosario, 92 Phil. 530)] and
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ownership passes to the heir at the very moment (a) Devisees – persons to whom gifts of real
of death, therefore, from that moment: (a) the heir property are given by virtue of a will (Art.
acquires the right to dispose of his share [De Borja 782)
v. Vda. De Borja, 46 SCRA 577] and; (b) the heir’s (b) Legatees – persons to whom gifts of
interest in the estate may be attached for purposes personal property are respectively given
of execution of his creditor [Reganon v. Imperial, by virtue of a will (Art. 782)
22 SCRA 80]
3) Legal or Intestate – those who succeed to
However, a person may be presumed dead for the the estate of the decedent who dies without a
purpose of opening his succession. (see rules on valid will, or one who does not leave a will, or
presumptive death, Art. 390-391) In this case, to the portion of such estate not disposed of
succession is only of provisional character by will
because there is always the chance that the 4) Mixed – is that effected partly by will and
absentee may be alive. partly by operation of law (Art. 780)
Future inheritance cannot be the subject of a NOTE: The distinction between heirs and
contract of sale because the seller owns no devisees or legatees is important in these cases:
inheritance while his predecessor lives. (Art. 1347 (a) Preterition (Art. 854), which totally annuls
in relation to Art. 777) the institution of heirs but devisees and
legacies remain valid
(c) Objective Element (Art. 776) (b) Imperfect/Ineffective disinheritance,
which annuls institution of heirs only
Inheritance – is the subject matter of succession insofar as it may prejudice the person
and includes all the transmissible property, rights, disinherited
and obligations of a person, which are not (c) After-acquired properties
extinguished by his death. (d) Acceptance or non-repudiation of
successional rights
NOTE: If the right or obligation is strictly personal,
it is not transmissible, hence, it is extinguished by B. TESTAMENTARY SUCCESSION
death. (Balane, supra, p.2)
1. WILLS
Determination of “Non-Transmissibility” of
Obligation Concept of a Will
1) Nature of the Obligation- must be personal It is an act whereby a person is permitted with the
obligation (e.g., to sing, dance, or obligations formalities prescribed by law to control to a certain
to do) degree the disposition of his estate to take effect
2) Intransmissibility by stipulation of the parties; after his death. (Art. 783)
3) Intransmissible by law
NOTE: A will disposes only the free portion of the
Succession Distinguished From Inheritance estate. (Art. 886; Balane, supra, p. 38)
Succession refers to the legal mode by which
inheritance is transmitted to the persons entitled to Characteristics of a Will
it; while inheritance refers to the universality or
entirety of the property, rights and obligations of a 1) Unilateral — does not need the approval of
person who died. any other person (implied in Art. 783)
3. KINDS OF SUCCESSORS 2) Strictly Personal Act (Arts. 784-785)
1) Compulsory – those who succeed by force • The making of a will is strictly a personal
of law and are entitled to a legitime, which is act; it cannot be left to the discretion of a
in proportion to the entire disposable estate third person, or accomplished through the
and is predetermined by law, of which they instrumentality of an agent or attorney
cannot be deprived by the testator, except (Art. 784)
through a valid disinheritance
• The following acts or stipulations may not
2) Voluntary or Testamentary – those who are
instituted by the testator in his/her will to be delegated to third persons:
succeed to the free portion (that which the a. Designation of heirs, devisees, or
testator can freely dispose) legatees; (Balane, supra, p.41)
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b. Duration or efficacy of the property to take effect after his death. (Art.
designation of heirs, devisees or 783)
legatees;
c. Determination of the portions which 9) Executed with testamentary capacity –
the heirs, devises, or legatees are to see below (Art. 796-803)
take, when referred to by name; and
10) Dispositive of property (Art. 783)
d. Determination of whether or not the
testamentary disposition is to be
11) Permitted/Statutory – Purely statutory such
operative (Arts.785 and 787) that without a law authorizing it, it is not
available.
NOTE: This is entirely different from
the acceptance or renunciation by the Interpretation of Wills
heir as beneficiary. The heir has the If a testamentary disposition admits of different
freedom to accept or renounce the interpretations, in case of doubt that interpretation
by which the disposition is to be operative shall be
testamentary benefit.
preferred. (Art. 788)
• Acts which may be delegated to third
persons (Art. 786): The words of a will are to be interpreted in a
a. Distribution of specific property or manner which will give effect to every expression,
sums of money that the testator may rather than one which will render any of the
leave in general to specified classes expressions inoperative. The interpretation which
will prevent intestacy shall be preferred. (Art. 791)
or causes; and
b. Designation of the persons,
Underlying Principle: Testacy is always
institutions or establishments to preferred than intestacy, because the former is the
which such property or sums are to express will of the decedent whereas the latter is
be given or applied. only his implied will. (Balane, supra, p. 45)
3) Free and Voluntary Act — any vice affecting Animus Testandi - The testator’s intent
testamentary freedom can cause the (animus testandi), as well as giving effect to
disallowance of the will (Art. 839) such intent, is primordial.
Exception: When the intention of the testator is
4) Formal and Solemn Act — the formalities contrary to law, morals or public policy.
are essential for validity (Art. 804-814; 820-
821) and will depend if what is executed is In case of doubt, the interpretation by which the
an attested or holographic will. disposition is to be operative or will sustain and
uphold the will in all its parts shall be adopted,
5) Act Mortis Causa — takes effect only after provided that it can be done consistently with the
the death of the testator (Art. 783) established rules of law.
6) Revocable or Ambulatory —Revocable at Kinds of Ambiguities In Wills (Art. 789)

any time during the testator’s lifetime (Art.
828) 1) Latent or Intrinsic Ambiguities
• those which do not appear on the face of
7) Individual Act — two or more persons the will
cannot make a single joint will, either for their • may be resolved through evidence
reciprocal benefit or for another person. (Art. aliunde or those outside of the will, except
818) oral declarations of the testator.
However, separate or individually executed 2) Patent or Extrinsic Ambiguities

wills, although containing reciprocal • those which appear on the face of the will
provisions (mutual wills) are not prohibited, itself
subject to the rules on disposicion captatoria. • must be resolved only by provisions
(Art. 875) contained in the will itself.
8) Executed with animus testandi – testator In resolving ambiguities in wills, any admissible
knowledgeable he wants to dispose of his and relevant evidence may be used to determine
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the intention of the testator, except for patent or that should have been acquired. (Balane, supra, p.
extrinsic ambiguities, for which the words of the 49)
will are to be resorted to.
Requirements for Validity of Wills
Oral declarations of the testator as to his intention 1) Extrinsic / Formal Validity – refers to the
cannot be used in resolving either latent or patent requirement of form and determined in
ambiguities (Balane, supra, p. 46). Why? A dead probate proceedings; it includes:
man cannot refute a tale. (a) Formalities provided by law
(b) Testamentary Capacity
Interpretation By General Meaning
The words of a will are to be taken in their ordinary 2) Intrinsic / Substantive Validity – refers to
and grammatical sense, unless a clear intention to the substance of the provisions and generally
use them in another sense can be gathered, and determined after probate (Balane, supra, p.
that other can be ascertained. (Art. 790, par. 1) 50)
Technical words in a will are to be taken in their EXTRINSIC INTRINSIC

technical sense, unless the context clearly VALIDITY VALIDITY
indicates a contrary intention, or unless it GOVERNING For Filipinos For Filipinos:
satisfactorily appears that the will was drawn LAW AS TO
and Foreigners: Law at the
TIME
solely by the testator, and that he was Law at the time time of death
unacquainted with such technical sense. (Art. 790) of execution (Art. 16 &
(Art. 795) 2263)
Principle of Severability
The invalidity of one of several dispositions For
contained in a will does not result in the invalidity Foreigners:
of the other dispositions, unless it is to be National law
presumed that the testator would not have made (Art. 16,
such other dispositions if the first invalid par.2; Art.
disposition had not been made. (Art. 792) 1039)
GOVERNING For Filipinos For Filipinos:
Property Acquired After the Execution of the LAW AS TO
and Foreigners: Philippine law
PLACE
Will (Art. 815-817)
Property acquired during the period between the For
execution of the will and the death of the testator Foreigners:
a. Citizenship
is NOT included among the property disposed of. National law
b. Domicile
(Art. 793)
Exception: When a contrary intention expressly c. Residence
appears on the will. (Art. 793) d. Place of
Execution
Interpretation Of Legacy and Devise e. Philippine
General Rule: In a legacy or devise, the testator Law
gives exactly the interest he has in the thing. (Art.
794)
Rules on Formal Validity of Wills
Exceptions: Every testator, whether Filipino or alien, wherever
1) It is clear in the will that he intended to convey he may be, has five choices as to what law to
a less interest. (Art. 794) follow for the form of his/her will:
2) The testator expressly declares that he (a) Law of his citizenship (Art. 15, 816, 817)
conveys a part greater than his interest in the
(b) Law of the place of execution (Art. 17)
thing. (Art. 929)
(c) Law of his domicile (Art. 816)
NOTE: In case the testator conveys a part greater
(d) Law of his residence (Art. 816)
than his interest in the thing, and if the person (e) Philippine law (Art. 15, 816, 817)
owning such interest in excess of that of the
testator does not wish to part with it, the solution in TESTAMENTARY CAPACITY AND INTENT
Art. 931 can be applied; the legatee or devisee
shall be entitled only to the just value of the interest It is the ability as well as the legal capacity to make
a will. It must be present at the time of the
execution of the will. (Balane, supra, p. 52)
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NOTE: Supervening capacity or incapacity does

Who are capacitated to make a will (NES) not invalidate an effective will, nor is the will of an
1) Natural person not expressly prohibited by incapable validated by supervening capacity (Art.
law to make a will. (Art. 796) 801).
2) Eighteen (18) years old and above (Art. 797).
3) Of Sound mind, at the time of its execution Mentally aberrant medically does not equate to
(Art. 798) testamentary incapacity. [Galvez v. Galvez, 26
Phil 243 (1913)]
All of these must be present at the time of the
execution of the will. (in relation with Art. 801) Burden of Proof of Soundness of Mind
1) The person who opposes probate of the will
Soundness of Mind has the burden of proof that the testator was
To be of sound mind, it is not necessary that the not of sound mind (Art. 800).
testator be in full possession of all his reasoning 2) The person who maintains the validity of the
faculties, or that his mind be wholly unbroken, will must prove that the testator executed it
unimpaired, or unshattered by disease, injury or during a lucid interval, when the testator was
other cause. (Art. 799) publicly known to be insane, one month or
less before making his will. (Art. 800)
A testator is considered of sound mind if at the
time of making of the will he knows the following: FORMS OF WILLS
1) Nature of the estate to be disposed of - The
testator should have a fairly accurate Kinds of Wills
knowledge of what he owns. (Balane, supra, (a) Notarial / Attested – an ordinary will
p. 53) acknowledged before a notary public by the
testator and the instrumental witnesses (Art.
2) Proper objects of his bounty - The testator 805-806)
should know under ordinary circumstances, (b) Holographic – a will totally handwritten,
who his relatives in the most proximate dated, and signed by the testator alone. (Art.
degrees, are. (Balane, supra, p. 53) 810)
3) Character of the testamentary act (Art. 799) Formalities Common To Notarial And
- The testator should know the legal nature of Holographic Wills:
a will. He or she must know that he is 1) Every will must be in writing (Art. 804); and
executing a document that disposes of his • Nuncupative (Oral) Wills are not allowed
properties gratuitously, which would take except in the Muslim Personal Laws of
effect upon his death. (Balane, supra, p. 53- the Philippines
54) • Any form of writing is allowed, provided
Legal Presumption in Favor Of Soundness Of i. Must be understood by others, and
Mind (Art. 800) ii. Must be capable of being preserved
General Rule: The law presumes that every and with permanence. Reason:
person is of sound mind, in the absence of proof generally, wills are probated after the
to the contrary. Forgetfulness, even if proven, is death of the testator, so it must have
not proof of unsoundness of mind. (Baltazar v. the character of permanence and
Laxa, G.R. No. 17449) must be understood by others.
Exceptions: 2) Executed in a language or dialect known to

(a) When the testator, one month or less before the testator (Art. 804)
the execution of the will, was publicly known • It must be understood by testator, but it is
to be insane (Art. 800); not required that the will specifically state
(b) When the testator executed the will after that it is in a language or dialect known to
being placed under guardianship or ordered the testator. (Abada v. Abaja, G.R. No.
committed to a mental institution (under 147145) This is merely evidentiary and
Rules 93 and 101, respectively of the Rules
should be proven during probate.
of Court), and before said order has been
lifted. (Baltazar v. Laxa, G.R. No. 174489) • The presumption that testator knows
and understands language or dialect
applies only if:
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i. The will was executed in a language Agent of the Testator Subscribing under his
generally spoken in the place of Express Direction
execution; and The essential thing for validity is that the agent
ii. The testator is a native or resident of wrote the testator’s name. It would be a good
such locality. (Abangan v. Abangan, thing, but not required, for the agent to indicate the
G.R. No. L-13431) fact of agency or authority. (Barut v. Cabacungan,
G.R. No. L-6285)
NOTARIAL/ATTESTED WILLS
Signed at the End
Requirements for Notarial Wills (Art. 805-806) Signing before the end invalidates not only the
1) Subscribed by the testator or his agent in his dispositions that come after, but the entire will,
presence and by his express direction at the because the one of the statutory requirements
end thereof, in the presence of the witnesses; would not have been complied with. (Azuela v.
2) Attested and subscribed by at least three Court of Appeals, G.R. No. 122880)
credible witnesses in the presence of the
Two Kinds of End
testator and of one another;
1. Physical end – where the writing stops
3) The testator, or his agent, must sign every
2. Logical end – where the last testamentary
page, except the last, on the left margin in the
disposition ends.
presence of the witnesses;
Signing at either end is permissible. (Balane,
4) The witnesses must sign every page, except
supra)
the last, on the left margin in the presence of
the testator and of one another;
5) All pages must be numbered correlatively in Signed in the Presence of Witnesses
Actual seeing is not required, but the ability to see
letters on the upper part of each page;
each other by merely casting their eyes in the
6) Attestation clause stating: proper direction. (Nera v. Rimando, G.R. No. L-
a) The number of pages of the will; 5971)
b) The fact that the testator or his agent
under his express direction signed the will Acts of Witnesses
and every page thereof, in the presence • Attesting – act of witnessing
of the witnesses; • Subscribing – act of signing their names in
c) The fact that the witnesses witnessed and the proper places of the will (Balane, supra,
signed the will and every page thereof in p. 81 citing Taboada v. Rosal, G.R. No. L-
the presence of the testator and one 36033; Caneda v. CA, G.R. No. 103554)
another;
7) Acknowledgement before a notary public The witnesses need not sign at the end of the will.
It is sufficient that they signed the will even
marginally. (Taboada v. Rosal, G.R. No. L-36033)
Subscribed by the Testator or his Agent in his
Presence and by his Express Direction at the
Signing on Every Page, Except the Last
End thereof, in the Presence of the Witnesses
Signing on every page of the will is mandatory,
The testator’s thumbprint is always a valid and
while the place of signing, i.e. left margin, is merely
sufficient signature for the purpose of complying
directory. The signature can be affixed anywhere
with the requirement of the law. There is no basis
on the page. (Balane, supra)
for limiting the validity of thumbprints only to cases
of illness or infirmity. (De Gala v. Gonzales G.R.
When No Marginal Signatures are Required
No. L-30289; Dolar v. Diancin, G.R. No. L-33365;
If the entire document consists of only two sheets,
Lopez v. Liboro, G.R. No. L-1787)
the first containing the will and the second, the
attestation clause, there need not be any marginal
However, a sign of the cross does not comply with
signatures at all. (Abangan v. Abangan, G.R. No.
the statutory requirement of signature, unless it is
L-13431)
the testator’s usual manner of signature or one of
his usual styles of signing. The cross does not
Order of Signing
have the trustworthiness of a thumbmark. (Garcia
The order of signing is immaterial, provided
v. Lacuesta, G.R. No. L-4067)
everything is done in a single transaction.
However, if the affixation of the signatures is done
in several transactions, then it is required that the
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testator affix his signature ahead of the witnesses. Certification Need Not be Signed in the
(Balane, supra, p. 86-87) Presence of the Testator and Witnesses
Whether or not the notary signed the certification
Pagination of acknowledgment in the presence of the testator
The pagination by means of a conventional and the witnesses, does not affect the validity of
system, a generally accepted or known sequential the will. All that must be done is that the testator
order, is required, while the pagination in letters on and the witnesses avow to the certifying officer the
the upper part of each page is merely directory. authenticity of their signatures and the
(Balane, supra) voluntariness of their actions in executing the
testamentary disposition. (Javellana v. Ledesma,
Attestation Clause Need Not be Signed by the G.R. No. L-7179)
Testator
The attestation clause is the affair of the Requirements for the Notary Public
witnesses, therefore, it need not be signed by the 1. Must be duly commissioned for the locality
testator. (Fernandez v. Vergel de Dios, G.R. No. where the acknowledgment is made
L-21151) (Guerrero v. Bihis, G.R. No. 174144)
2. Must not be one of the three attesting
Witnesses Must Sign at the End of Attestation witnesses (Cruz v. Villasor, G.R. No. L-32213)
Clause
The attestation clause is a memorandum of the
facts attending the execution of the will required by NOTE: There is no requirement that an attested
law to be made by the attesting witnesses, and it will should be dated. Consequently, a variance
must necessarily bear their signatures. An between the indicated dates of execution and
unsigned attestation clause cannot be considered acknowledgement does not in itself invalidate the
an act of the witnesses, since the omission of their will. (Ortega v. Valmonte, G.R. No. 157451)
signatures at the bottom negatives their
participation. If an attestation clause not signed at Special Requirements for Handicapped
the bottom be admitted, it would be easy to add Testators
such clause to a will on a subsequent occasion
and in the absence of the testator and any or all Deaf/Deaf-Mute Testator (Art. 807)
witnesses. (Cagro v. Cagro, G.R. No. L-5826; 1) If able to read — he must read the will
Azuela v. Court of Appeals, G.R. No. 122880) personally
2) If unable to read — he must designate two
Attestation Clause Separate from persons to read the will and communicate to
Acknowledgement Clause him, in some practicable manner, its contents.
An attestation clause is mandatory for attested
wills. It is separate and distinct from an Blind Testator (Art. 808)
acknowledgement clause. These two cannot be The will shall be read to him twice, once by one of
merged. (Echavez v. Dozen Construction, G.R. the subscribing witnesses and another by the
No. 192916) notary public before whom the will is
acknowledged.
Acknowledgment
The act of one who has executed a deed in going The rationale behind the requirement of reading
before some competent officer (i.e., notary public) the will to the testator if he is blind or incapable of
or court and declaring it to be his act or deed. It reading the will himself (as when he is illiterate), is
involves an extra step undertaken whereby the to make the provisions of the will known to him, so
signatory actually declares to the notary public that that he may be able to object if they are not in
the same is his or her own free act and deed. (Lee accordance with his wishes. (Garcia v. Vasquez,
v. Tambago, A.C. No. 5281) G.R. No. L-26615)
Two-Fold Purpose of the Acknowledgement The special requirements for handicapped

1. To safeguard the testator’s wishes long after testators are mandatory; non-compliance with
his demise; and Articles 807 or 808 will result in nullity and denial
of probate. (Balane, supra) However, in the case
2. To assure that his estate is administered in the
of Alvarado v. Gaviola, Jr., 226 SCRA 348 , the
manner that he intends it to be done (Lee v.
Supreme Court stated that substantial compliance
Tambago, A.C. No. 5281) is sufficient as when the lawyer who drafted the will
read the will aloud before the testator (who was
suffering from glaucoma), the three instrumental
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witnesses and the notary public. The court stated:

“So when an interpretation already given assures The law does not specify a particular location
such ends, any other interpretation whatsoever, where the date should be placed in the will. The
that adds nothing but demands more requisites only requirements are that the date be in the will
entirely unnecessary, useless and frustrative of itself and executed in the hand of the testator.
the testator's will, must be disregarded.“ (Labrador v. Court of Appeals, G.R. Nos. 83843-
44)
Rule on Substantial Compliance (Art. 809)
Signed by the Testator
Article 809 is Applicable Only to the The testator must sign at the end of testamentary
Attestation Clause dispositions. Otherwise, the dispositions written
1) In the absence of below his signature, which are not subsequently
a) Bad faith dated and signed by him will be invalidated. (Art.
b) Forgery 812)
c) Fraud
d) Undue and improper pressure and Forms of Holographic Wills
A holographic will is subject to no other form, and
influence
may be made in or out of the Philippines, and need
2) Defects and imperfections in the form of not be witnessed. (Art. 810)
attestation or in the language used therein
3) Shall not render the will invalid Additional Dispositions in a Holographic Will
4) If it is proved that the will was in fact executed Additional dispositions in a holographic will must
and attested in substantial compliance with all be dated and signed by the testator. (Art. 812) The
the requirements of Art. 805. signature and the date may be done in the
following manner:
However, only omissions in the attestation clause 1. Signature and date after each additional
which can be supplied by an examination of the disposition, or
will itself or by intrinsic evidence will not be fatal to 2. Each additional disposition signed and
the validity of the will. The omissions in the undated, but the last disposition signed and
attestation clause which can only be proved by dated. (Art. 813)
extrinsic evidence would result in the invalidation
of the attestation clause and ultimately of the will What if additional dispositions are dated but
itself. (Caneda v. CA, G.R. No. L-18076\) not signed? Only the last disposition that is dated
and signed will be valid.
However, the attestation clause indisputably
omitted to mention the number of pages Insertion, Cancellation, Erasure or Alteration
comprising the will. Nevertheless, the in a Holographic Will (Art. 813)
acknowledgment portion of the will supplied the General Rule: If made by the testator
omission by stating that the will has five pages and contemporaneously with the making of the will, the
was therefore deemed substantial compliance by full customary signature of the testator should
the Supreme Court under Article 809. (Tanchanco authenticate all alterations, cancellations and
v. Santos, G.R. No. 204793) erasures. If not, the general rule is that the will is
valid but the alterations, cancellations and
HOLOGRAPHIC WILLS erasures will not be valid. (Velasco v. Lopez, G.R.
No. 905).
Requirements for Holographic Wills (EHAND-
DSL) Exceptions:
1. Entirely HANDwritten by the testator 1. Where there is only one testamentary
2. Dated by him disposition and the unauthenticated
3. Signed by him (Art. 810; Balane, supra, p. alteration affects the sole disposition (e.g.,
one heir substituted by another), then the
130)
whole will is void (Kalaw v. Relova, 132
4. Executed in a Language or dialect known to
SCRA 237)
the testator (Art. 804) 2. Where the alteration or erasure is on the
signature and the date, the whole essence is
Date affected making the whole will void. (Spouses
The date of the will should include the day, month, Alejo v. CA, G.R. No. 106720)
and year of its execution. (Roxas v. De Jesus,
G.R. No. L-38338)
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ALTERATIONS MADE BY A THIRD PERSON 6) Must not have been convicted of falsification
Without the The insertion, cancellation, of a document, perjury, or false testimony (Art.
consent of the erasure or alteration is not 821)
testator considered as written.
With the The will is void for not being The above qualifications must be possessed at the
consent of the totally in the handwriting of time of attesting the will. Their subsequent
testator the testator (Art. 810) incompetence shall not prevent the allowance of
the will. (Art. 822)
Prohibition on Joint Wills
Two or more persons cannot make a will jointly, or Witnesses to the will need not be “credible”
in the same instrument, either for their reciprocal under the naturalization law as they are not
benefit or for the benefit of a third person. (Art. tasked to be character witness. In order to be
818) competent as instrumental witnesses there
must only be a showing of having the
Joint Will – One document which constitutes the qualification under Articles 820 to 821. It is not
wills of two or more individuals. These kinds of mandatory that evidence be first established on
wills are void. (Balane, supra) record that the witnesses have good standing in
the community or that they are honest, upright
If there are several documents, each serving as or reputed to be trustworthy and reliable.
one independent will, even if they are written on (Gonzales v. Court of Appeals, 90 SCRA 183)
the same sheet, they are not joint wills. (Balane,
supra)
Creditors as Witnesses
Creditors can be witnesses to his or her debtor’s
NOTE: Joint wills executed by Filipinos in a foreign
will. A mere charge on the estate of the testator for
country shall not be valid in the Philippines, even
the payment of debts due at the time of death does
though authorized by the laws of the country
not prevent the creditor from being a competent
where they may have been executed. (Art. 819)
witness. (Art. 824)
However, reciprocal wills of foreign nationals
jointly probated in another jurisdiction, can be
CODICILS AND INCORPORATION BY
admitted for reprobate in the Philippines since the
REFERENCE
prohibition is in the making of joint wills, and not on
the joint probate of wills. (Vda. De Perez v. Tolete,
Codicil – A supplement or addition to a will, made
G.R. No. 76714)
after the execution of a will and annexed, to be
taken as a part of the will. It explains, adds, or
Reasons of Public Policy Against Joint Wills
alters, any disposition made in the original will.
1) Limitation on the modes of revocation. (i.e.
(Art. 825)
one of the testators would not be able to
destroy the document without also revoking it
Codicils Must be Executed as in Wills
as the will of the other testator, or in any event,
In order that a codicil may be effective, it shall be
as to the latter, the problem of unauthorized
executed as in the case of a will. (Art. 826)
destruction would come in) (Balane, supra, p.
171)
However, the codicil does not need to conform to
2) Diminution of testamentary secrecy; (Balane,
the form of the will to which it refers. An attested
supra)
will may have a holographic codicil, or vice versa.
3) Danger of undue influence (Dacanay v.
(Balane, supra)
Florendo, G.R. No. L-2071)
4) Danger of one testator killing the other
Requirements for Incorporation by Reference
(Dacanay v. Florendo, G.R. No. L-2071)
If a will refers to a document or paper, such
document or paper will be considered a part of the
WITNESSES TO WILLS
will if the following requisites concur (EPPS):
1. The document or paper referred to in the will
Qualifications:
must be in Existence at the time of the
1) Of sound mind (Art. 820)
execution of the will;
2) At least 18 years of age (Art. 820)
2. The will must clearly describe and identify the
3) Not blind, deaf, or dumb (Art. 820)
same, stating among other things the number
4) Able to read and write (Art. 820)
of Pages thereof;
5) Domiciled in the Philippines (Art. 821)
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3. It must be identified by clear and satisfactory

Proof as the document or paper referred to Instances of Revocation by Operation of Law
therein; and a) Decree of legal separation, nullity or
4. It must be Signed by the testator and the annulment of marriage for dispositions in favor
witnesses on each and every page except in of the guilty spouse (Family Code, Art. 63, par.
case of voluminous books of account or 4)
inventories. (Art. 827) b) Preterition (Art. 854)
c) Legacy or credit against third person or
The documents, inventories, books of accounts, remission of debt was provided in will and
documents of titles, and other papers of similar subsequently, testator brings action against
nature should under no circumstances make debtor (Art. 936)
testamentary dispositions, for then the formal d) Substantial transformation of specific thing
requirements for wills would be circumvented. bequeathed, or sale or disposition of property
(Balane, supra) bequeathed or devised before the death of the
testator (Art. 957)
NOTE: Holographic wills cannot incorporate e) When heir, devisee or legatee commits any of
documents by reference unless the incorporated the acts of unworthiness (Art. 1032)
paper is also entirely in the handwriting of the f) Annulled or void ab initio marriages revoke
testator. In case of notarial wills, it is sufficient that testamentary dispositions made by one
the signatures of the testator and witnesses on spouse in favor of the other (Family Code, Art.
every page of the incorporated document except 50)
in case of voluminous books of account or g) If both spouses of the subsequent marriage
inventories. (Balane, supra, p. 183) acted in bad faith, said marriage shall be void
ab initio and testamentary dispositions made
REVOCATION OF WILLS AND by one in favor of the other are revoked by
TESTAMENTARY DISPOSITIONS operation of law. (Family Code, Art. 44)
A will may be revoked by the testator at any time
before his death. Any waiver or restriction of this Revocation by Some Will, Codicil, or Other
right is void. (Art. 828) Writing Executed as Provided in case of Wills
Express – When there is a revocatory clause
Rules for Revocation (Art. 829) expressly revoking the previous will or a part
1) If revocation made in the Philippines – thereof. (Balane, supra, p. 193)
Philippine law
2) If revocation is made outside the Philippines Implied – When the provisions thereof are partially
and testator is not domiciled in the Philippines: or entirely inconsistent with those of the previous
a) Law of the place where the will was made, wills. (Art. 831)
or
b) Law of the place where the testator was NOTE: Subsequent wills which impliedly revoke
domiciled at the time of revocation the previous ones, annul only such dispositions in
3) If revocation is made outside the Philippines the prior wills as are inconsistent with or contrary
and testator is domiciled in the Philippines to those contained in the later wills. (Art. 831)
a) Philippine law
b) Law of the place of revocation Requisites for a Revocation by Subsequent
c) Law of the place where the will was made Instrument
(Balane, supra, p. 184) 1. The subsequent instrument must comply with
the formal requirements of a will. (Vda. de
Modes of Revoking a Will (Art. 830) Molo v. Molo, G.R. No. L-2538)
No will shall be revoked except in the following 2. The testator must possess testamentary
cases: (LSPD) capacity. (Balane, supra, p. 185)
1) By operation of Law – May be total or partial 3. The subsequent instrument must either
2) By Subsequent will – some will, codicil, or contain an express revocatory clause or be
other writing executed as provided in case of incompatible with the prior will. (Art. 831)
wills The subsequent will must be probated in order
3) By Physical Destruction – by burning, tearing, to take effect. (Vda. de Molo v. Molo, G.R. No.
cancelling, or obliterating the will with intention L-2538)
of revoking it, by the testator himself, or by
some other person in his presence, and by his
express direction.
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Requisites for a Valid Revocation by Physical second will was perfectly valid. This is because he
Destruction (Art. 830 (3); Balane, supra, p. 186- would have not destroyed the first will had he
187) known that second will is not valid. The revocation
1. Testamentary capacity at the time of is therefore dependent on the validity of the
performing the act of destruction; second will. (Vda. de Molo v. Molo, G.R. No. L-
2. Intent to revoke (animus revocandi); 2538)
3. Actual physical act of destruction, even partial
as long as it is not due to desistance (corpus); Revocation Based on a False or Illegal Cause
4. Completion of the subjective phase; and Revocation based on a false or illegal cause is null
5. Performed by the testator himself or by some and void. (Art. 833)
other person in his presence and express
direction (Art. 830(3)) Requisites for revocation for a false cause:
1) The cause must be concrete, factual and not
NOTE: No amount of destruction without animus purely subjective.
revocandi, without destruction (even partial, as 2) It must be false.
long as not due to desistance) will revoke a will. 3) The testator must not know of its falsity.
(Art. 830 (3); Balane, supra, p. 187) 4) It must appear from the will that the testator is
revoking because of the cause, which is false.
If the will was burned, torn, cancelled, or (Balane, supra, p. 204)
obliterated by some other person, without the
express direction of the testator, the will may still NOTE: Even if the revocation is for a false cause
be established, and the estate distributed in but the will is holographic and the revocation is by
accordance therewith, if its contents, and due physical destruction, the revoked will can no
execution, and the fact of its unauthorized longer be probated.
destruction, cancellation, or obliteration are
established according to the Rules of Court. (Art. The recognition of an illegitimate child does not
830) lose its legal effect, even though the will wherein it
was made should be revoked. (Art. 834)
Doctrine of Presumed Revocation
Where the will cannot be found following the death REPUBLICATION AND REVIVAL OF WILLS
of the testator and it is shown that it was in the
testator's possession when last seen, the Republication
presumption is that he must have destroyed it with If the testator wishes to republish a will that is void
animus revocandi. (Gago v. Mamuyac, G.R. No. L- as to form, the only way to republish it is to execute
26317) a subsequent will and reproduce it. (Art. 835)
Revocation by Subsequent Will Effective even Revival (Art. 836)

if New Will Becomes Inoperative The testator needs only to execute a subsequent
A revocation made in a subsequent will shall take will or codicil referring to the previous will if the
effect, even if the new will should become testator wishes to republish a will that is either:
inoperative by reason of the incapacity of the heirs, (a) Void for reason other than a formal defect
devisees or legatees designated therein, or by (b) Previously revoked
their renunciation. (Art. 832)
REPUBLICATION REVIVAL
General Rule: Revocation is always effective. Takes place by an Takes place by
act of the testator operation of law
Exception: Doctrine of Dependent Relative Corrects extrinsic and Restores a revoked
Revocation – when the testator provides in the extrinsic defects will in certain
subsequent will that the revocation of the prior one instances
is dependent on the capacity or acceptance of the
heirs, devisees, or legatees instituted in the If after making a will, the testator makes a second
subsequent will. (Vda. de Molo v. Molo, G.R. No. will expressly revoking the first, the revocation of
L-2538) the second will does not revive the first will, which
can be revived only by another will or codicil. (Art.
In the doctrine of dependent relative revocation, 837)
the first will may be admitted to probate and given
effect, despite it being torn provided that the
testator tore it with the mistaken belief that the
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Illustration: pass properties. (De la Cerna v. De la Cerna G.R.

In 1985, X executed Will I. In 1987, X executed Will No. L-28838)
II expressly revoking Will I. In 1990, X executed
Will III, revoking Will II. The revocation of Will II by Scope of Probate Proceedings
Will III does not revive Will I, unless of course, Will General Rule: Probate proceedings cover the due
III expressly revives Will I. (Balane, supra, p. 205) execution of the will, extrinsic of formal validity and
testamentary capacity of the testator only, and no
PROBATE (ALLOWANCE OR other extraneous matters.
DISALLOWANCE OF WILLS)
Intrinsic validity cannot be ruled upon (i.e.
Probate – Judicial process of proving: impairment of legitime, unlawful provisions,
1) Compliance with formal requirements of will; disqualifications of heirs, legatees, devices, etc.)
and or other extraneous matters. An extrinsically valid
2) Testamentary capacity of the testator. will admitted to probate can still be declared void
Irrespective of whether its provisions are valid and intrinsically. (Balane, supra, p. 221)
enforceable or otherwise. (Fernandez v.
Dimagiba, G.R. No. L-23638) Exceptions: Other extraneous matters, which can
be raised and decided in probate proceedings.
No will shall pass either real or personal property (Nepomuceno v. CA, G.R. No. L-62952; Balanay
unless it is proved and allowed in accordance with v. Martinez, G.R. No. L-39247.)
the Rules of Court. (Art. 838 (1))
Thus:
Mandatory Character of Probate 1) Provisional ruling on ownership of
Probate is mandatory in the sense that if there is a properties
will, properties of the estate should pass only in The ruling is only for purposes of inclusion in the
accordance with the will, provided it is admitted for inventory of assets of the estate. It not conclusive
probate. It is mandatory also in the sense that it and is subject to final decision in a separate action
takes precedence over intestate proceedings. to resolve title. In case of community properties of
Court ordered consolidation of the intestate spouses, there must first be liquidation of ACP or
proceedings with the testate proceedings, with the CPG because the assets of the estate should be
testate proceedings taking precedence. Heirs net of the share of surviving spouse. (Pastor v.
cannot enter into compromise agreement different Pastor G.R. No. L-56340).
from the terms of the will. If admitted to probate
and found valid, the will should be the basis of However, the rule of provisional character of
disposition as the express will of the testator. determination of ownership not being within the
(Roberts v. Leonidas, G.R. No. L-55509) proper jurisdiction of the probate court applies only
if the dispute is between the estate and third
Two Kinds of Probate persons claiming ownership, in which case a
(a) Post-mortem – After the testator’s death separate proceeding should be instituted to settle
(b) Ante-mortem – During his lifetime (Balane, the issue of ownership. A probate court has
supra, p. 217) jurisdiction if the dispute is only among heirs, and
the issue is to determine whether the property is
The testator himself may, during his lifetime, part of the ACP/CPG or is a separate property of
petition the court having jurisdiction for the one of the spouses. (Romero v. CA, G.R. No.
allowance of his will. (Art. 838) 188921)
Finality of a Probate Decree The approval of the inventory and the concomitant
Subject to the right of appeal, the allowance of the determination of the ownership as basis for
will, either during the lifetime of the testator or after inclusion or exclusion from the inventory were
his death, shall be conclusive as to its due provisional and subject to revision at any time
execution. (Art. 838) Once a decree of probate during the course of the administration
becomes final in accordance with the rules of proceedings. (Aranas v. Mercado, G.R. No.
procedure, it is res judicata. 156407)
Joint wills are considered to have a defect in form 2) Apparent intrinsic defect
(non-compliance with formalities). However, if If the intrinsic defect is apparent on the face of the
allowed and probated and becomes final, it can will, since probate of the will is unnecessary (as in
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preterition, which annuls the will) (Nuguid v.

Nuguid, G.R. No. 23445) ATTESTED / NOTARIAL WILLS
Uncontested One subscribing witness
3) For practical considerations when only, if such witness testify
testamentary provisions are of doubtful validity that the will was executed as
such as when it is apparent that the disposition is is required by law (Rule 76,
in favor of a person the testator is guilty of Section 5, Rules of Court)
concubinage with (Nepomuceno v. CA, G.R. No. Contested All the subscribing witnesses,
L-62952); and and the notary (Rule 76,
Section 11, Rules of Court)
4) All heirs are in agreement that intrinsic
HOLOGRAPHIC WILLS
validity should be determined first. (Reyes v. CA,
Uncontested At least one witness who
G.R. No. 139587)
knows the handwriting and
signature of the testator
NOTE: Once the will is admitted to probate, the
explicitly declares that the will
court may continue to proceed in determining the
and the signature are in the
intrinsic validity of the will.
handwriting of the testator (Art.
811)
Decree of Probate Conclusive as to the Due
Contested At least three witnesses who
Execution or Formal Validity of the Will
know the handwriting and
This means that:
signature of the testator
1) The fact that the will is indeed the testator’s
explicitly declare that the will
last will and testament;
and the signature are in the
2) Compliance with the required formalities
handwriting of the testator (Art.
(Balane, supra, p. 221);
811)
3) Testamentary capacity of the testator;
(Gallanosa v. Arcangel, G.R. No. L-29300)
Probate of Lost or Destroyed Will
4) Due execution of the will – meaning, that
Requirements for the Probate of a Lost or
testator was of sound disposing mind, that he
Destroyed Will (Rules of Court, Rule 76, Sec. 5)
freely executed the will, that there is no
1. Establish the execution and validity of the will
duress, fraud, undue influence, menace, that
2. Establish that the will is in existence at the
the will is genuine (not forged), and that
time of death of the testator, or is shown to
testator was not disqualified from making a
have been fraudulently or accidentally
will. (Dorotheo v. CA, G.R. No. 108581).
destroyed in the lifetime of the testator without
his knowledge
Proof of Extrinsic Validity
3. Its provisions must be clearly and distinctly
Attested / Notarial Will
proved by at least two credible witnesses
1. Present original will (ideally)
2. Present any attesting witnesses and/or notary
Lost or Destroyed Holographic Will
public to prove due execution/ testamentary
General Rule: In the probate of a holographic will,
capacity; and
the document itself must be produced. A lost
3. If no one is available, present any available
holographic will cannot be probated. (Gan v. Yap,
evidence to show authenticity or validity of
G.R. No. L-12190)
contents of attestation clause. (Rules of Court,
Rule 76)
The oppositor may present witnesses who know
the testator’s handwriting, who after comparing the
Holographic Will
will with other writings or letters of the deceased,
1. Present original will or at least a photo static,
have come to the conclusion that such will has not
scanned or any legible copy; and
been written by the hand of the testator. And the
2. One person familiar with the handwriting of
court in view of such contradictory testimony may
the testator, unless contested in which case,
use its own visual sense, and decide in the face of
three witnesses familiar with the handwriting
the document, whether the will submitted to it has
of the testator must be presented to prove that
indeed been written by the testator. Obviously,
the will was written in the handwriting of the
when the will itself is not submitted, these means
testator. (Rules of Court, Rule 76, Sec. 5) If
of opposition and of assessing the evidence are
there are no competent witnesses and the
not available. The only guaranty of authenticity—
court deems it necessary, expert testimony
the testator’s handwriting—has disappeared. (Gan
may be resorted to. (Art. 811)
v. Yap, G.R. No. L-12190)
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An Affidavit of Self-Adjudication is only proper

Exception: A photostatic copy or Xerox copy of when the affiant is the sole heir of the decedent.
the holographic will may be allowed because (Rebusquillo v. Gualvez, G.R. No. 204029)
comparison can be made with the standard
writings of the testator. (Rodelas v. Aranza, G.R. Case Cited in the 2022 Bar Syllabus: Treyes
No. L-58509) v. Larlar
“Unless there is a pending special proceeding for
Proof of Testamentary Capacity the settlement of the decedent’s estate or for the
Testamentary capacity including soundness of determination of heirship, the compulsory or
mind can be proven by the attestation clause and intestate heirs may commence an ordinary civil
testimony of witnesses and/or notary public. In the action to declare the nullity of a deed or instrument
absence of any proof, the court may rely on the [in this case the Affidavit of Self-Adjudication by
presumption of soundness of mind. (Art. 800) the husband], and for recovery of property, or any
other action in the enforcement of their ownership
Exclusive Grounds for Disallowance of Wills rights acquired by virtue of succession, without the
(LIF-P-FraM) (Art. 839) necessity of a priori and separate judicial
1. Formalities required by Law were not declaration of their status as such.” (Treyes v.
complied with; Larlar, G.R. No. 232579, 2020)
2. Testator was Insane or incapable of making a
will at the time of execution (lack of “Even assuming arguendo that the Rules (of
testamentary capacity); Court) strictly provide that a separate judicial
3. The will was executed through Force or under determination of heirship in a special proceeding
duress, or the influence of fear, or threats; is a precondition in an ordinary civil action wherein
4. The will was procured by undue and improper heirship is already established by compulsory
Pressure and influence, on the part of the succession or intestacy and is only sought to be
beneficiary or of some other person; enforced, which, as already discussed at length, is
5. The testator’s signature was procured through not the case, the Rules must still yield to the
Fraud; and specific provisions of the Civil Code that certain
6. If the testator acted by Mistake or did not relatives of the decedent [such as the siblings in
intend that the instrument he signed should be this case] attain their status as either compulsory
his will at the time of affixing his signature. or intestate heirs and that their successional rights
are transmitted and enforceable at the very
NOTE: Once a will is disallowed because of any of moment of death [the SC cited Article 777 of the
the following grounds, intestate succession will Civil Code] without the need of such separate
ensue. judicial determination.” (Treyes v. Larlar, G.R. No.
232579, 2020)
2. INSTITUTION OF HEIRS
“Given the clear dictates of the Civil Code that the
An act by virtue of which a testator designates in rights of the heirs to the inheritance vest
his will the person or persons who are to succeed immediately at the precise moment of the
him in his property and transmissible rights and decedent’s death [Art. 777 of the Civil Code] even
obligations. (Art. 840) without judicial declaration of heirship, and the
various Court En Banc and Division decisions
NOTE: The declaration of heirship must be made holding that no prior judicial declaration of heirship
in a special proceeding, not in an independent civil is necessary before an heir can file an ordinary
action. However, the Court held that recourse to civil action to enforce ownership rights acquired by
administration proceedings to determine who the virtue of succession through the nullification of
heirs are is sanctioned only if there is a good and deeds divesting property or properties forming part
compelling reason for such recourse. Hence, the of the estate and reconveyance thereof to the
Court had allowed exceptions to the rule requiring estate or for the common benefit of the heirs of the
administration proceedings as when the parties in decedent”, the Supreme Court clarified that the
the civil case already presented their evidence rule laid down in Ypon, Yaptinchay,
regarding the issue of heirship, and the RTC had Portugal,…and other similar cases, which requires
consequently rendered judgment upon the issues prior determination of heirship in a separate
it defined during the pre-trial. (Rebusquillo v. special proceeding as a prerequisite before one
Gualvez, G.R. No. 204029) can file an ordinary civil action to enforce
ownership rights acquired by virtue of succession,
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is abandoned. (Treyes v. Larlar, G.R. No. 232579, Requisites for a Valid Institution of Heir
2020) 1. Designation in the will of person/s to succeed
(Art. 840)
A will shall be valid even though it does not contain 2. The will specifically assigns to such person an
an institution of an heir, or such institution does not inchoate share in the estate.
comprise the estate, or even though the person so 3. The person so named has capacity to
instituted should not accept the inheritance or succeed.
should be incapacitated to succeed. In such case, 4. The will is formally valid
the testamentary dispositions made in accordance 5. No vice of consent is present
with law shall be complied with, and the remainder 6. No preterition results from the effect of such
of the estate shall pass to the legal heirs. (Art. 841) will (Art. 854)
DISPOSITIONS BY WILL Designation in the Will of Person/s to

No compulsory Dispose by will the entire Succeed
heirs hereditary estate
With compulsory Dispose by will the free Directory – Designation of name and surname
heirs portion (net hereditary (Balane, supra, p. 240)
estate minus legitimes)
(Balane, supra, p. 239) Mandatory – Identity of the heir must be
established, otherwise void disposition, unless his
Intestacy Follows If Entire Free Portion Not identity becomes certain.
Disposed of by Will
If the testator has instituted one or several heirs, NOTE: If there is ambiguity in the designation, the
and the institution of each is limited to an aliquot designation must be resolved by discerning the
part of the inheritance, intestate succession takes testator’s intent. If the ambiguity cannot be
place with respect to the remainder of the resolved, intestacy to that portion results. (Art.
disposable portion. (Art. 851) 844, par. 2)
Rules on Institution of Aliquot Share Less Unknown person – A successor whose identity
Than or In Excess of the Whole Estate cannot be determined because the designation in
The rules will apply if the following concur: the will is unclear or ambiguous. (Balane, supra,
1. There is more than one instituted heir. p. 241)
2. The testator intended them to get the whole
estate or the whole disposable portion. NOTE: Unknown persons do not refer to one with
3. The testator has designated a definite or whom the testator is not personally acquainted.
aliquot portion for each heir. (Balane, supra, The testator may institute somebody who is a
p. 251-252) perfect stranger to him, provided the identity is
clear. (Balane, supra, p. 241)
RULES ON INSTITUTION OF ALIQUOT
SHARE LESS THAN OR IN EXCESS OF THE Dispositions in Favor of an Unknown Person
WHOLE ESTATE (Art. 845)
Art. 852 Art. 853 General Rule: Every disposition in favor of an
Total of all the aliquot Total of all the aliquot unknown person shall be void.
parts of the instituted parts of the instituted Exception: By some event or circumstance his
heirs do not cover the heirs exceed the identity becomes certain.
whole inheritance, or whole inheritance, or
the whole free portion the whole free portion Dispositions in Favor of a Definite Class
Remedy: Each part Remedy: Each part A disposition in favor of a definite class or group of
shall be increased shall be reduced persons shall be valid. (Art. 845)
proportionately proportionately
Presumptions in Institution of Heirs
NOTE: In Article 852, the difference between the In the absence of specific provisions in the will,
total of all the portions and the whole of the these presumptions will apply: (E-In-S)
inheritance or free portion cannot pass by (a) Equality – Heirs who are instituted without
intestacy because the testator’s intention is to give designation of shares inherit in equal parts.
the instituted heirs the entire amount. (Balane, (Art. 846)
supra, p. 252)
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Shares of Brothers and Sisters in Definition of Preterition

Testamentary Succession Preterition is the total omission of a compulsory
If the testator should institute his brothers and heir from the inheritance. It consists in the silence
sisters, and he has some full blood and others of the testator with regard to a compulsory heir,
of half-blood, the inheritance shall be omitting him in his will, either by not mentioning
distributed equally unless a different intention him at all, or by not giving him anything in the
appears. (Art. 848) hereditary property but without expressly
disinheriting him, even if he is mentioned in the will
NOTE: In intestacy, the proportion of 2:1 in the latter case. (Heirs of Ureta v. Ureta, G.R. No.
between full and half-blood siblings and the 165748)
Iron Curtain Rule between legitimate and
illegitimate siblings shall be applied. NOTE: Preterition is a concept of testamentary
succession and requires a will. (Heirs of Ureta v.
(b) Individuality – Heirs collectively instituted are Ureta, G.R. No. 165748)
deemed individually named unless a contrary
intent is prove. (Art. 847) Elements of Preterition (OCLiT)
(c) Simultaneity – When several heirs are 1. There must be a total Omission of one, some
instituted, they are deemed instituted or all of the heir/s in the will, without the heir
simultaneously and not successively. (Art. being expressly disinherited.
849) 2. The omission must be that of a Compulsory
heir in the direct line.
Effect of False Cause for Institution of an Heir 3. The omitted compulsory heir must be Living
General Rule: The falsity of the stated cause does or at least conceived at the time of testator’s
not affect the validity or efficacy of the institution. death. (Art. 854)
The false cause is merely considered as not 4. The omission must be complete and Total in
written. (Art. 850) character. The heir in question must have
received nothing from the testator by way of:
Exceptions: It appears from the will that the a. Testamentary succession;
testator would not have made such designation if b. Legacy or devise;
he had known the falsity of such cause. (Art. 850) c. Donation inter vivos;
d. Intestacy (Balane, supra, p. 266)
Requisites for the Exception to Apply:
1. The cause for the institution of heirs must be NOTE: What constitutes preterition is not omission
stated in the will (Austria v. Reyes, G.R. No. in the will but being completely left out of the
L-23079); inheritance. (Seangio v. Reyes, G.R. No. 140371-
2. The cause must be shown to be false (Austria 72)
v. Reyes, G.R. No. L-23079);
3. It must appear from the face of the will that the Determination of Preterited Heirs
testator would not have made such institution The determination of whether or not there are
if he had known the falsity of the cause. preterited heirs can be made only upon the
(Austria v. Reyes, G.R. No. L-23079) testator’s death. (JLT Agro v. Balansag, G.R. No.
PRETERITION 141882)
The preterition or omission of one, some, or all of Compulsory Heir in the Direct Line
the compulsory heirs in the direct line, whether This covers children or descendants, or in default
living at the time of the execution of the will or born of children or descendants, parents or
after the death of the testator, shall annul the ascendants. Illegitimate descendants and
institution of heir; but the devises and legacies ascendants are also protected, since the law does
shall be valid insofar as they are not inofficious. not distinguish. (Balane, supra)
(Art. 854)
Adopted children are considered compulsory heirs
If the omitted compulsory heirs should die before in the direct line, and may be preterited. This is
the testator, the institution shall be effectual, because adoption gives to the adopted child the
without prejudice to the right of representation. same rights and duties as if he were a legitimate
(Art. 854) child of the adopter. (Acain v. Intermediate
Appellate Court, G.R. No. 72706)
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Effects of Preterition Successional Rights are Intransmissible

1. The institution of heir is annulled. An heir, whether compulsory, voluntary, or legal,
The annulment is in toto, unless in the will transmits nothing to his heirs, in case of
there are, in addition, testamentary predecease, incapacity, renunciation, or
dispositions in the form of devises or legacies. disinheritance. However, in case of predecease or
(Nuguid v. Nuguid, G.R. No. L-23445) incapacity of compulsory or legal heirs, as well as
Preterition annuls the institution of an heir and disinheritance of compulsory heirs, the rules on
annulment throws open to intestate representation shall apply. (Balane, supra)
succession the entire inheritance. (Morales v.
Olandriz, G.R. No. 198994, Acain v. There is Right of Representation for
Intermediate Appellate Court, G.R. No. Compulsory Heirs under the ff:
72706) 1) Predecease;
2) Incapacity
2. Devises and legacies shall remain valid as 3) Disinheritance (Art. 859)
long as they are not inofficious.
The only provisions which do not result in No Right of Representation for Testamentary /
intestacy are the legacies and devises made Voluntary Heirs
in the will for they should stand valid and
respected, except insofar as the legitimes are There is Right of Representation for Legal /
concerned. (Acain v. Intermediate Appellate Intestate Heirs under the ff:
Court, G.R. No. 72706) If the devises and 1) Predecease;
legacies impair the legitimes, they are merely 2) Incapacity
reduced. (Balane, supra)
3. SUBSTITUTION OF HEIRS
3. If the omitted compulsory heir should die
before the testator, the institution shall be The appointment of another heir so that he may
effectual, without prejudice to the right of enter into the inheritance in default of the heir
representation. originally instituted. (Art. 857)
PRETERITION DISINHERITANCE NOTE: Only one substitution is allowed. The

Deprivation of a Deprivation of the person substituting cannot be substituted again.
compulsory heir of his compulsory heir of his
legitime is tacit legitime is express Substitute Subject to Same Charges and
Law presumes that Done with a legal Conditions Imposed on Original Heir
there has been cause General Rule: The substitute shall be subject to
merely an oversight the same charges and conditions imposed upon
or mistake on the part the instituted heir. (Art. 862)
of the testator Exception: The testator expressly provided the
It results in the The nullity is limited to contrary, or the charges or conditions are
complete nullity of the the portion of the personally applicable only to the heir instituted.
institution of heir, estate of which the (Art. 862)
except the devises disinherited heir has
and legatees, as long been legally deprived. Classes of Substitution
as they are not (a) Vulgar or Simple – The testator may
inofficious. designate one or more persons to substitute
Omitted heir gets not If disinheritance is the heir or heirs instituted in case such heir or
only his legitime but unlawful or heirs should:
also his share in the ineffective, for
i. Die before him (Predecease)
free portion not absence of one or
disposed of by way of other of the ii. Should not wish to be instituted,
legacies or devises requisites, the (Renounce) or
compulsory heir is iii. Should be incapacitated to accept the
merely restored to his inheritance (Incapacitated) (Art. 859)
rightful share. (Nuguid
v. Nuguid , G.R. No.
Simple Substitution
L-23445)
Simple substitution may be done by the
testator:
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i. By specifying all the three causes, 3. The second heir must be ONE degree from
ii. By merely providing for simple the first heir. Thus, the fideicommissary can
substitution. (Art. 859) only be a parent or a child of the fiduciary.
(Palacios v. Ramirez, G.R. No. 27952)
A simple substitution, without a statement of 4. The dual obligation imposed upon the
the cases to which it refers, shall comprise fiduciary to Preserve the property and to
the three causes mentioned, unless the Transmit it after the lapse of the period to the
testator has otherwise provided. (Art. 859) fideicommissary heir. (Art. 865)
5. Both heirs must be Living and qualified to
Restricted Simple Substitution succeed at the time the testator’s death.
The testator may limit the operation of 6. The fideicommissary substitution must be
simple substitution by specifying only one Expressly made. (Art. 865)
or two of the three causes. 7. The fideicommissary substitution is imposed
on the Free portion of the estate and never on
(b) Brief (Brevilocua)- Two or more persons may the legitime. (Art. 864)
be substituted for one person (Art. 860)
NOTE: Pending the transmission of the property,
(c) Compendious (Compediosa) – one person the fiduciary is entitled to all the rights of a
may be substituted for two or more heirs (Art. usufructuary having the right to use and enjoy the
860) property, but without the right to dispose the same.
Although the fideicommissary heir does not
(d) Reciprocal (Reciproca) – If heirs instituted in receive the property upon the testator’s death, his
unequal shares should be reciprocally right thereto vests at the time and merely becomes
substituted, the substitute shall acquire the subject to a period, and that right passes to his
share of the heir who dies, renounces, or is own heirs should he die before the fiduciary’s right
incapacitated, unless it clearly appears that expires. (Balane, supra)
the intention of the testator was otherwise. If
there are more than one substitute, they shall Tenure of Fiduciary
have the same share in the substitution as in Primary Rule: Period indicated by the testator
the institution. (Art. 861) Secondary Rule: If the testator did not indicate a
period, then the fiduciary’s lifetime. (Balane,
supra, citing Manresa)
NOTE: If one is substituted for two or more original
heirs, substitution will only take place if all the Two Ways of Making an Express Imposition of
original heirs are disqualified. If not all of the Fideicommissary Substitution
original heirs are disqualified, the share left vacant 1) By the use of the term fideicommissary; or
will accrue to the surviving co-heir or co-heirs. 2) By imposing upon the first heir the absolute
obligation to preserve and to transmit to the
(e) Fideicommissary Substitution - If the second heir. (Art. 865)
testator institutes an heir with an obligation to
deliver to another the property so inherited. Transmission of Property from First Heir to
Second Heir
The heir instituted to such condition is called
General Rule: The fiduciary should deliver the
the first heir or fiduciary heir, the one to property without deductions.
receive the property is the fideicommissary or Exceptions: Deductions which arise from
second heir. (Art. 863) legitimate expenses, credits and improvements.
(Art. 865)
Requisites for a Fideicommissary
Substitution (1st-2nd-1-PT-LEFree) Right to Succession of the Second Heir
1. A fiduciary or a FIRST heir who takes the The second heir shall acquire the right to the
property upon the testator’s death. (Art, 863) succession from the time of the testator’s death,
2. A fideicommissary or SECOND heir who even though he should die before the fiduciary.
The right of the second heir shall pass to his heirs.
takes the property subsequently from the
(Art. 866)
fiduciary. (Art. 863)
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The following shall not take effect: (Art. 867) Definitions

1) Fideicommissary substitutions which are not (a) Condition – Future or uncertain event, or a
made in an express manner, either by giving past event unknown to the parties, upon which
them this name, or imposing upon the fiduciary the performance of an obligation depends
the absolute obligation to deliver the property (Art. 1179)
to a second heir; (b) Term – The day or time when an obligation
2) Provisions which contain a perpetual
either becomes demandable or terminates
prohibition to alienate, and even a temporary
one, beyond the limit fixed in Article 863. (Art. 1193)
3) Those which impose upon the heir the charge (c) Mode – The statement of the object of the
of paying to various persons successively, institution or the application of the property left
beyond the limit prescribed in Article 863, a by the testator or the charge imposed on the
certain income or pension; heir. (Art. 882) It is an obligation imposed
4) Those which leave to a person the whole or upon the heir, without suspending the
part of the hereditary property in order that he effectivity of the institution or the rights to the
may apply or invest the same according to succession. (Rabadilla v. Court of Appeals,
secret instructions communicated to him by the G.R. No. 113725)
testator.
(d) Disposicion Captatoria/ Scriptura
Nullity of Fideicommissary Substitution Captatoria – A condition that the heir shall
The nullity of the fideicommissary substitution make some provision in his will of the testator
does not prejudice the validity of the institution of or of any other person. This is prohibited
heirs first designated; the fideicommissary clause because it will make the making of the will a
shall simply be considered as not written (Art. 868) contractual act. (Art. 875)
such that the institution of the first heir simply
• It is not merely the condition that is
becomes pure and unqualified. (Balane, supra)
declared void but the testamentary
Ownership and Usufructuary Provisions disposition itself which contains the
A provision whereby the testator leaves to a condition. (Balane, supra)
person the whole or part of the inheritance, and to (e) Casual Condition – A condition is casual if it
another the usufruct, shall be valid. (Art. 869) depends upon chance and/or upon the will of
a third person
Successive Usufructuaries (f) Mixed Condition - A condition is mixed if it
If the testator gives the usufruct to various
depends both partly upon the will of the heir
persons, not simultaneously, but successively, the
requisites of a fideicommissary substitution must himself and upon chance and/or the will of a
be present. (Art. 869) third person
(g) Potestative Condition – One the fulfillment
Period of Inalienability of the Estate of which depends purely on the heir.
General Rule: The dispositions of the testator (h) Suspensive Term – One that merely
declaring all or part of the estate inalienable for suspends the demandability of a right;
more than 20 years are void. (Art. 870) happening is certain.
Exception: In fideicommissary substitution, the (i) Caucion Muciana – Bond or security that
period is the lifetime of the first heir. should be given in favor of those who would
get the property if the condition not be
complied with. (Art. 879)
4. CONDITIONAL TESTAMENTARY
DISPOSITIONS and Interpretation
DISPOSITIONS WITH A TERM • When in doubt whether there is a condition or
merely a mode, consider the same as mode.
The institution of an heir may be made
conditionally, or for a certain purpose or cause. • When in doubt as to whether there is a mode
(Art. 871) or merely a suggestion, consider same only
Three Kinds of Testamentary Dispositions as a suggestion.
(a) Conditional dispositions • A condition suspends but does not obligate,
(b) Dispositions with a term while a mode obligates but does not suspend
(c) Dispositions with a mode (for he who inherits with a mode is already an
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heir; one who inherits conditionally is not yet a. If testator is unaware of fact of fulfillment-
an heir.) Deemed fulfilled.
b. If testator is aware of the fact of fulfillment
Condition on the Legitimes is Prohibited i. If it can no longer be fulfilled again –It is
The testator cannot impose any charge, condition deemed fulfilled
or substitution whatsoever upon the legitimes. ii. If it can be fulfilled again – It must be
Should he do so, the same shall be considered as fulfilled again. (Art. 877)
not imposed. (Art. 872)
Constructive Compliance (Art. 883, par. 2)
Conditions which are Impossible, Contrary to If the person interested in the condition should
Law or Good Customs prevent its fulfillment, without the fault of the heir,
These conditions are considered as not imposed, the condition shall be deemed to have been
and shall not prejudice the heir, even if the testator complied with.
provide otherwise. (Art. 873) The testamentary
disposition is not annulled; it simply becomes pure. RULES ON APPLICABILITY OF
(Balane, supra) CONSTRUCTIVE COMPLIANCE
CASUAL
MIXED CONDITION
Conditions Prohibiting Marriage CONDITION
General Rule: An absolute condition not to Not Dependent Dependent on
contract a first or subsequent marriage shall be Applicable Partly on Will of Third Party
considered as not written. (Art. 874) Chance
Exception: The condition has been imposed on Not Applicable only if
the widow or widower by the deceased spouse, or Applicable third party is
by the latter’s ascendant’s or descendants. (Art. interested in the
874) condition (Art.
883)
The right of usufruct, or an allowance or some
personal prestation may be devised or The estate shall be placed under administration
bequeathed to any person for the time during until:
which he or she should remain unmarried or in (a) Condition is fulfilled, or
widowhood. (Art. 874) (b) Until it becomes certain that condition will
never be fulfilled, or
RULES ON POTESTATIVE, CASUAL AND (c) Until arrival of the term
MIXED CONDITIONS
Positive Potestative Condition (Art. 876) The same shall be done if the heir does not give
General Rule: It must be fulfilled as soon as the the security required as in negative potestative
heir learns of the testator’s death. conditions. (Art. 880)
Exception: The condition, already complied with,
is of such nature that it cannot be fulfilled again. IF THE IF IT BECOMES CERTAIN
CONDITION THAT CONDITION WILL
Negative Potestative Condition (Art. 879) HAPPENS NOT HAPPEN
If the potestative condition imposed upon the heir The property will The property will be turned
is negative, or consists in not doing or not giving be turned over to over to a secondary heir, if
something, the heir shall comply by giving a the instituted there is one, or to the
security (caucion muciana) that he will not do or heir. intestate heirs, as the case
give that which has been prohibited by the testator, may be.
and that in case of contravention he will return
whatever he may have received, together with its Dispositions with a Term
fruits and interests. Suspensive Term (Art. 878)
A disposition with a suspensive term does not
Casual or Mixed (Art. 877) prevent the instituted heir from acquiring his rights
It is sufficient if it happens or be fulfilled at any and transmitting them to his heirs even before the
other time before or after the testator’s death, arrival of the term.
unless testator provides otherwise.
NOTE: The heir’s right vests upon the testator’s
If already fulfilled at the time of execution of the death. Should the heir die before the arrival of the
will suspensive term, he merely transmits his right to
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his own heirs who can demand the property when 3. An absolute condition not to contract a first or
the term arrives. (Balane, supra) subsequent Marriage. (Art. 874)
However, if the condition not to contract a first
Resolutory Term (Art. 885) or subsequent marriage has been imposed
The designation of the day or time when the on the widow or widower by the deceased
effects of the institution of an heir shall commence spouse, or by the latter’s ascendants or
or cease shall be valid. (Art. 885) descendants, such condition is valid. (Art.
874)
TERM 4. Disposition Captatoria – Any disposition
SUSPENSIVE RESOLUTORY made upon the condition that the heir shall
Before the arrival of Before the arrival of make some provision in his WILL in favor of
the term, the property the term, the property the testator or of any other person. (Art. 875)
should be delivered should be delivered to
to the intestate heirs. the instituted heir. No
However, a sufficient security is required of 5. LEGITIME
security has to be them. (Art. 885)
posted by the The part of the testator’s property which he cannot
intestate heirs. dispose of because the law has reserved it for his
compulsory heirs. (Art. 886)
Dispositions with Modes
Dispositions with modes may be claimed at once, NOTE: When the disposition is for valuable
provided that the instituted heirs give security for consideration, there is no diminution of the estate
compliance with the wishes of the testator and for by merely a substitution of value, that is the
the return of anything he or they may receive, property sold is replaced by the equivalent
together with its fruits and interests, if he or they monetary consideration. (Buenaventura v. Court
should disregard this obligation. (Art. 882, par. 2) of Appeals, G.R. No. 126376; Manongsong v.
Estimo, G.R. No. 136773)
Indicators of a Modal Institution
The testator states the following: Classes of Compulsory Heirs
1. The object of the institution; (a) Primary – Those who have precedence over
2. The purpose or application of the property left and exclude other compulsory heirs
by the testator; i. Legitimate or adopted children and/or
3. The charge imposed by the testator upon the descendants (legitimate), with
heir. (Rabadilla v. Court of Appeals, G.R. No. respect to their legitimate parents
113725) and ascendants (Arellano v. Pascual,
G.R. No. 189776 citing Tolentino
NOTE: An obligation imposed upon the heir 1992 ed., p. 252)
should not be considered a condition unless it
clearly appears from the will itself that such was (b) Secondary – Those who succeed only in the
the intention of the testator. In case of doubt, the absence of the primary heirs
institution should be considered as modal and not i. Legitimate parents and ascendants
condition. (Rabadilla v. Court of Appeals, G.R. No. (legitimate), with respect to their
113725, 2000) legitimate children and descendants
ii. Parents of illegitimate children – only
Analogous Performance in default of any kind of descendants
When without fault of the heir, a modal institution (Arellano v. Pascual, G.R. No.
cannot take effect in the exact manner stated by 189776, citing Tolentino 1992 ed., p.
the testator, it shall be complied with in a manner 252)
most analogous to and in conformity with his
wishes. (Art. 883, par. 1) (c) Concurring – Those who succeed together
with the primary or the secondary compulsory
Prohibited or Void Conditions heirs
The prohibited or void conditions are: (LIM-Will) i. Widow or widower (legitimate) – the
1. Charges, conditions, substitutions, upon the surviving spouse referred to is the
Legitimes. (Art. 872) spouse of the decedent.
2. Impossible conditions and those contrary to ii. Illegitimate children and/ or
law or good customs. (Art. 873) descendants (Arellano v. Pascual,
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G.R. No. 189776 citing Tolentino (b) Legitimate parents or ascendants are
1992 ed., p. 252) excluded only by legitimate children. (Arts.
896, 899)
Compulsory Heirs (Art. 887) (c) Parents of illegitimate children are excluded
(a) Legitimate or adopted children and/or by both legitimate and illegitimate children.
legitimate descendants. (Art. 903)
(d) The illegitimate ascending line does not go
NOTE: The nearer exclude the more remote. beyond the parents. (Art. 903; Balane, supra,
Hence, children exclude grandchildren, p.345)
except when the rule on representation is (e) In the direct ascending line, there is the rule of
proper. division by line. The legitime is divided equally
between the paternal and maternal side. After
(b) Legitimate parents and/or ascendants, the portions corresponding to the line has
parents of illegitimate children. been assigned, there will be equal
apportionment between or among the
NOTE: Legitimate parents or ascendants are recipients within the line, should there be
excluded only by legitimate children. Parents more than one. (Art. 890)
of illegitimate children are excluded by both (f) There is no right of representation in the direct
legitimate and illegitimate children (Art. 903). ascending line. (Art. 972)
The illegitimate ascending line does not go (g) For a surviving spouse to inherit from the
beyond the parents. deceased, the marriage between the
decedent and the widow/widower must be
(c) Surviving spouse either valid or voidable. (Balane, supra, p.342)
NOTE: The marriage between the decedent Rules of Surviving Spouse as Sole
and the surviving spouse must either be valid Compulsory Heir (Art. 900)
or voidable. If voidable, there should have
been no final decree of annulment at the time General Rule: The surviving spouse gets 1/2 of
of the decedent’s death. the estate
Separation de facto is not a ground for the Exception: 1/3 of the estate, if the following
disqualification of the surviving spouse as circumstances are present:
heir. 1. The marriage was in articulo mortis;
2. The testator died within 3 months from the
Effect of decree of legal separation: time of the marriage;
a. On the offending spouse – disqualified 3. The parties did not cohabit for more than 5
from inheriting years; and
b. On the innocent spouse – no effect 4. The spouse who died was the party in articulo
c. If after the final decree of separation there mortis at the time of the marriage.
was a reconciliation between the
spouses, the reciprocal right to succeed is
restored.
(d) Illegitimate children and/or descendants
NOTE: In all cases of illegitimate children,

their filiation must be duly proved. (Art. 887)
As to illegitimate descendants the rule is also

the nearer exclude the more remote, without
prejudice to representation when proper.
General Rules in Ascertaining Legitimes

(a) Rule of proximity: The nearer exclude the
more remote, except when the rule on
representation is proper. (Art. 962)
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DIFFERENT COMBINATIONS OF Shares of Compulsory Heirs (Art. 888-903)
HEIR LEGITIME FREE

PORTION
Legitimate Children & Descendants 1/2 1/2
Legitimate Children (LC) & Surviving Legitimate Children – 1/2 Whatever

Spouse Spouse – Equal to share of 1 LC remains
One Legitimate Child/Descendant & Child/Descendant – 1/2

1/4
Surviving Spouse Spouse – 1/4
Legitimate Children -1/2

Whatever
Legitimate Children (LC) & Illegitimate
Illegitimate Children – 1/2 of share of 1 LC as remains
Children (ILC)
may be accommodated, otherwise reduce
proportionately
LC –1/2
Legitimate Children/Descendants, Spouse – equal to 1 share of 1 LC
Surviving Spouse & Illegitimate Whatever
Children ILC – 1/2 of share of 1 LC as may be remains
accommodated, otherwise reduce
proportionately
LC – 1/2
ILC – 1/2 of share of 1 LC as may be
One Legitimate Child, Illegitimate Whatever
accommodated, otherwise reduce
Children & Surviving Spouse remains
proportionately
Spouse –1/4 of estate
Parents & Ascendants of Legitimate

1/2 1/2
Children
Parents/Ascendants of Legitimate Legitimate Parents/Ascendants – 1/2

Children & Illegitimate Children Illegitimate Children – 1/4 1/4
Legitimate Parents/Ascendant – 1/2

Parents/Ascendants of Legitimate
Children & Surviving Spouse 1/4
Spouse – 1/4
Parents/Ascendants of Legitimate Parents/Ascendants –1/2

Children, Illegitimate Children & ILC –1/4
1/8
Surviving Spouse Spouse – 1/8
General Rule or If in articulo mortis, but
1/2
cohabited for more than 5 years – 1/2
Surviving Spouse Only
1/3 if in articulo mortis 2/3
ILC – 1/3
Surviving Spouse & Illegitimate
1/3
Children
Spouse – 1/3
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Surviving Spouse & Parents Of Spouse – 1/4

1/2
Illegitimate Children Parents – 1/4
Illegitimate Children Only 1/2 1/2
Parents Of Illegitimate Children 1/2 1/2
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Reserva Troncal Three Transmissions Involved in Reserva

This is the reservation by virtue of which an Troncal:
ascendant who inherits from his descendant any 1) A first transmission by lucrative title
property which the latter may have acquired by (inheritance or donation) from an ascendant
gratuitous title from another ascendant or a or brother or sister to the deceased
brother or sister, is obliged to reserve the property descendant; (Mendoza v. Delos Santos, G.R.
for the benefit of relative within the third degree No. 176422)
and who belong from the same line from which the
property came from. (Art. 891) 2) A posterior transmission, by operation of law
(intestate succession or legitime) from the
NOTE: It constitutes as an exception to both the deceased descendant (prepositus) in favor of
system of legitimes and the order of intestate another ascendant, the reservista, which two
succession. transmissions precede the reservation;
(Mendoza v. Delos Santos, G.R. No. 176422)
Purpose of Reserva Troncal:
1) To reserve certain properties in favor of It is this second transfer that creates the
certain persons reserva. (Solivio v. Court of Appeals, G.R. No.
2) To prevent persons outside a family from 83484)
acquiring, by some chance or accident,
property which otherwise would have 3) A third transmission of the same property (in
remained with the said family consequence of the reservation) from the
reservistas to the reservatarios or the relatives
Requisites of Reserva Troncal (GWOT) within the third degree from the deceased
1) The property was acquired by a person descendant belonging to the line of the first
(Prepositus) from an ascendant or from a ascendant, brother or sister of the deceased
brother or sister (Origin) by Gratuitous title; descendant. (Gonzalez v. CFI, G.R. No.
34395)
Acquisition by Gratuitous Title (First
Transfer) Parties Involved
a. By donation, or 1. Origin or Mediate Source – The ascendant,
b. By any kind of succession brother, or sister from whom the prepositus
had acquired the property by gratuitous title;
2) The said descendant died Without legitimate (Balane, supra)
issue;
2. Prepositus – The descendant/brother/ sister
NOTE: Only legitimate descendants will who died and from whose death the
prevent the property from being inherited by the reservistas in turn had acquired the property
legitimate ascending line by operation of law. by operation of law. The so-called “arbiter of
the fate of the reserva troncal.” (Balane, supra)
3) The property is inherited by another
descendant (Reservista) by Operation of law; While the property is owned by the prepositus,
he has all the rights of ownership over it and
Transmission by Operation of Law (Second may exercise such rights in order to prevent a
Transfer) reserva from arising. He can terminate the
a. Compulsory succession, or reserva by
b. Intestate succession (a) Substituting or alienating or disposing the
property during his lifetime;
4) There are relatives within the Third degree (b) Bequeathing or devising it either to the
(Reservatarios) belonging to the line from potential reservista or to other third person
which the said property came. (Chua v. Court (subject to rights of compulsory heirs to
of First Instance, G.R. No. L-29901) the legitime); or
(c) Partitioning in such a way as to assign the
NOTE: The provisions of Art. 891 only apply to property to parties other than the potential
legitimate relatives. (Nieva v. Alcala, G.R. No. L- reservista (subject to the constraints of the
13386) legitime).
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3. Reservista – The ascendant of the prepositus and nieces of the prepositus, who have the right to
of whatever degree, obliged to reserve the represent their fathers or mothers who are
property; (Balane, supra) brothers and sisters of the prepositus. (Mendoza
v. De los Santos, G.R. No. 176422)
4. Reservatarios – The relatives of the
prepositus within the third degree and who There will only be one instance of representation
belong to the line from which the property among reservatarios, i.e., a case of the prepositus
came and for whose benefit the reservation is being survived by brothers/sisters and children of
constituted. (Balane, supra) a predeceased or incapacitated brother/sister.
NOTE: The reference point from which the (Balane, supra)
third degree requirement should be reckoned
is the prepositus – the one at the end of the Juridical Nature of Reserva Troncal
line from which the property came and upon Nature of Reservista’s Right
whom the property last resolved by descent. 1) The reservista’s right over the reserved
(Mendoza v. Delos Santos, G.R. No. 176422, property is one of ownership;
2013) 2) The ownership is subject to a resolutory
condition. (The existence of reservatarios at
NOTE: As long as the reservatario is alive at the time of the reservista’s death)
the time of the reservista’s death, he qualifies 3) The right of ownership is alienable, but subject
as such, even if he was conceived and born to the same resolutory condition.
after the prepositus’ death. (Balane, supra) 4) The reservista’s right of ownership is
registrable. (Edroso v. Sablan, G.R. No. 6878)
Two Events to be Considered to Determine the
Right of the Reservatarios over the Reservable The reservista has no power to appoint, by will,
Property which reservatarios are to get the reserved
1. Death of Prepositus – All qualified property. (Gonzales v. CFI, G.R. No. L-34395)
reservatarios merely have an inchoate right.
The reservistas own the property subject to Nature of Reservatarios’ Right
the resolutory condition 1) The reservatarios have a right of expectancy
2. Death of Reservista – surviving reservatarios over the property;
acquire a perfect right. (Balane, supra) 2) The right is subject to a suspensive condition.
(The expectancy ripens into ownership if the
Preference Among Reservatarios reservatarios survive the reservista).
Upon the death of the ascendant reservista, the 3) The right is alienable, but subject to the same
reservable property should pass, not to all the suspensive condition.
reservatarios as a class, but only to those nearest 4) The right is registrable. (Sienes v. Esparcia,
in degree to the descendant (prepositus), G.R. No. L-12957)
excluding those reservatarios of more remote
degree. The reserva troncal merely determines Property Reserved
the group of relatives to whom the property should Any kind of property may be reserved. The very
be returned; but within that group the individual same property must go through the process of the
right to the property should be decided by the three transmissions, in order for the reserva to
applicable rules of ordinary intestate succession, arise. (Balane, supra)
since Art. 891 does not specify. (Padura v.
Baldovino, G.R. No. 11960) Reserva Maxima/Minima Theories: Applies only
if two circumstances concur:
Representation Among the Reservatarios 1. Prepositus makes a will instituting the
There is a right of representation on the part of ascendant-reservista to the whole or a part of
reservatarios who are relatives of the prepositus the free portion; (Balane, supra)
within the third degree. These reservatarios have 2. There is left in the prepositus’ estate, upon his
the right to represent their ascendants. (Florentino death, property reservable. (Balane, supra)
v. Florentino, G.R. No. 14856)
Relatives within the 4th and succeeding degrees

cannot be considered reservatarios. They cannot
claim representation of their predecessors since
the right granted in Art. 891 is a personal right. The
only recognized exemption is the case of nephews
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Exceptions:
RESERVA MAXIMA RESERVA MINIMA 1. Parent in the interest of his family to keep any
The whole property is Every single property manufacturing, agricultural or industrial
reservable for as long in the Prepositus’ enterprise intact may order the legitime of the
as it can be estate must be other children be paid in cash. (Art. 1080)
accommodated in the deemed to pass, 2. Express prohibition of the partition of the
legitime or intestate partly by will and estate for a period not exceeding 20 years.
share of the partly by operation of (Art. 1083)
reservatarios law, so that in 3. The family home shall continue despite the
general, only 50% of death of one or both spouses or of the
the property is unmarried head of the family for a period of
reservable. ten years or for as long as there is a minor
Maximizes the scope Minima finds wider beneficiary, and the heirs cannot partition the
of reserve acceptance in the same, unless the court finds compelling
Philippines reasons therefor. (Family Code, Art. 159)
4. Reserva Troncal (Art. 891)
Rights of the Reservatarios and the
Corresponding Obligations of the Reservista Renunciation or Compromise of Future
(Balane, supra) (SIAA) Legitime (Art. 905)
1. To Inventory reserved properties; Every renunciation or compromise as regards
2. To Annotate the reservable character (if future legitime between the person owing it and his
registered immovables) in the Registry of compulsory heir is void, and the latter may claim
Property within 90 days from acceptance by the same upon the death of the former; but they
the reservista; must bring to collation whatever they may have
3. To Appraise the movables; received by virtue of the renunciation or
4. To Secure by means of mortgage: compromise.
a. The indemnity for any deterioration of or
damage to the property occasioned by NOTE: The rights of the heirs are merely inchoate
the reservista’s fault or negligence, and because it is only perfected upon the testator’s
b. The payment of the value of such death. Hence, there is still nothing to renounce.
reserved movables as may have been
alienated by the reservista onerously and No contract may be entered into with respect to
gratuitously. (Dizon v. Galang, G.R. No. future inheritance except in cases expressly
23144) authorized by law. (Art. 1347, par. 2)
Reserva Troncal is Extinguished By Completion of Legitime (actio ad supplendam

1. The death of the reservista; legitimam)
2. The death of all the reservatarios; Any compulsory heir to whom the testator has left
3. Renunciation by all the reservatarios, by any title less than the legitime belonging to him
provided that no other reservatario is born may demand that the same be fully satisfied. (Art.
subsequently; 906)
4. Total fortuitous loss of the reserved property;
5. Confusion or merger of rights, as when the General Rule: Anything a compulsory heir
reservatarios acquire the reservista’s right by receives by gratuitous title from the predecessor is
contract inter vivos; considered an advance on the legitime and is
6. Prescription or adverse possession. (Balane, deducted from it. (Art. 909 & Art. 910)
supra)
Exceptions:
Principle of Non-Impairment of Legitimes 1. If the predecessor gave the compulsory heir a
General Rule: The testator cannot deprive his donation inter vivos and provided that it was
compulsory heirs of their legitime. (Art. 904) not to be charged against the legitime. (Art.
Exception: Valid disinheritance 1062)
2. Testamentary dispositions made by the
General Rule: The testator cannot impose upon predecessor to the compulsory heir, unless
the same any burden, encumbrance, condition, or the testator provides that it should be
substitution of any kind whatsoever. (Art. 904) considered part of the legitime. (Art. 1063)
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The impaired legitime of a compulsory heir shall a. First, reduce pro-rata non-preferred
be filled up in the following manner: legacies and devises, and the
(a) It must first be taken from the part of the testamentary dispositions.
estate not disposed of by will. b. Second, reduce pro rata the preferred
(b) If it is not sufficient, it must then be taken from legacies and devises.
the shares of the testamentary heirs, c. Third, reduce the donations inter vivos
legatees, and devisees, proportionally. (Art. according to the inverse order of their
855) dates. (Art. 911)
d. Fourth, reduce the legitimes of the
Testamentary dispositions that impair or diminish illegitimate children.
the legitime of compulsory heirs shall be reduced 7. Distribution of the residue of the estate in
on petition of the same insofar as they may be accordance with the will of the testator.
inofficious or excessive. (Art. 907)
Donations inter vivos to Compulsory Heirs
Article 907 of the Civil Codes states General Rule: Donations inter vivos to a
that "[t]estamentary dispositions that impair or compulsory heir shall be charged to their legitime
diminish the legitime of the compulsory heirs shall (Art. 909)
be reduced on petition of the same, insofar as they Exception: If the predecessor gave the
may be inofficious or excessive." Evidently, if the compulsory heir a donation inter vivos and
testator disposed of his estate in a manner that provided that it was not to be charged against the
impaired or diminished the legitime of compulsory legitime. (Art. 1062)
heirs, the latter may petition to demand that those
dispositions be reduced or abated to the extent Donations inter vivos to Strangers
that they may be inofficious or excessive. (Estella Donations made to strangers shall be charged to
v. Estella, G.R. No. 245469, 09 December 2020) the part of the estate which the testator could have
disposed of by will. (Art. 909)
INCOMPLETE PRETERITION
LEGITIME Stranger – Anyone who does not succeed as a
Heir not entirely Total omission of the compulsory heir. (Balane, supra)
forgotten heir
Less than the portion Total deprivation of Principles on Devises or Legacies of Usufruct
of the legitime legitime or Life Annuities or Pensions
Remedy is to demand Effect is the total 1. If, upon being capitalized according to
for completion of annulment of the actuarial standards, the value of the grant
legitime institution of heirs exceeds the free portion, it has to be reduced,
because the legitime cannot be impaired. (Art.
Steps in Determining the Legitime of 911)
Compulsory Heirs 2. The testator can impose no usufruct or any
1. Determination of the gross value of the estate other encumbrance on the part that passes as
at the time of the death of the testator; legitime. (Art. 911)
2. Determination of all debts and charges which 3. Subject to the two rules stated above, the
are chargeable against the estate; compulsory heirs may elect between ceding to
3. Determination of the net value of the estate by the devisee/legatee the free portion, or the
deducting all the debts and charged from the proportional part thereof corresponding to the
gross value of the estate; said legacy/devise, and complying with the
4. Collation or addition of the value of all terms of the usufruct or life annuity or pension.
donations inter vivos to the net value of the (Art. 911; Balane, p. 435)
estate;
5. Determination of the amount of the legitime When Devise Subject to Reduction Consists of
from the total thus found; Indivisible Real Property
6. Imputation of all the value of all donations inter
vivos made to compulsory heirs against their IF THE EXTENT OF IF THE EXTENT OF
legitimes and of the value of all donations inter REDUCTION IS REDUCTION IS ½
vivos made to strangers against the LESS THAN ½ OF OR MORE OF THE
disposable free portion and restoration to the THE VALUE OF THE THING
hereditary estate if the donation is inofficious. THING
If legitime is impaired, the following reductions It shall be given to the It shall be given to the
shall be made: devisee. compulsory heirs.
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testamentary disposition made in a prior will.

In either case, there should be pecuniary (Balane, supra at p. 437-438)
reimbursement to the party who did not get his
physical portion of the thing devised. (Art. 912) NOTE: Therefore, the heir loses his legitime.
As to the free portion, it passes through
The devisee who is entitled to a legitime may Substitution, Accretion, and Intestacy.
retain the entire property, provided its value does
not exceed that of the disposable portion and of • The children or descendants of the person
the share pertaining to him as legitime. (Art. 912) disinherited shall take his or her place and
If the heirs or devisees do not choose to avail shall preserve the rights of compulsory heirs
themselves of the right granted in Art. 912, the with respect to the legitime. (Art. 923)
thing devised should be disposed of by:
1. Any other heir or devisee, who elects to do so, NOTE: The disinherited heir can be
may acquire the thing and pay the parties their represented in the legitime and also to any
respective shares in money; intestate portion that he or she would have
2. If no heir or devisee elects to acquire it, it shall inherited:
be sold at public auction and the net proceeds a. Only in the descending line, never in the
accordingly divided between the parties ascending
concerned. (Art. 913) b. In collateral line, only with respect to
nephews and nieces.
6. DISINHERITANCE
• The disinherited parents shall not have the
Causes of Vacancy in Succession usufruct or administration of the property
(a) Disinheritance - The testator creates it which constitutes the legitime. (Art. 923)
himself (Art. 916)
(b) Repudiation - The heir rejects the inheritance Ineffective Disinheritance
(Art. 1041) Disinheritance without specification of the cause,
(c) Incapacity/Predecease - Something or for a cause the truth of which, if contradicted, is
happens to the heir not proved, or which is not one of those set forth
in this Code, shall annul the institution of heirs
Disinheritance insofar as it may prejudice the person disinherited;
A compulsory heir may, in consequence of but the devises and legacies and other
disinheritance, be deprived of his legitime, for testamentary dispositions shall be valid to such
causes expressly stated by law. (Art. 915) extent as will not impair the legitime. (Art. 918)
Requisites for Valid Disinheritance (WET2- Effects of Ineffective Disinheritance

LUP) 1. If the testator had made disposition of the
1) Effected only through a valid Will (Art. 916) entire estate, the testamentary disposition is
Note: Will containing disinheritance must be annulled only insofar as they prejudice the
probated. legitime of the person disinherited. It does not
Disinheritance only occurs in testamentary affect the dispositions of the testator with
succession. Its counterpart in intestate respect to the free portion
succession is unworthiness. 2. If the testator did not dispose of the free
2) For a cause Expressly stated in the will (Art. portion, the compulsory heir will be given all
916, 918) that he is entitled to receive as if the
3) Cause must be certain and True (Art. 918) disinheritance has not been made, without
4) Total; prejudice to lawful dispositions made by the
5) It must be for a cause expressly stated by Law testator in favor of others.
(Art. 916, in relation to Art. 919-921) 3. Devisees, legacies and other testamentary
6) Unconditional; dispositions shall be valid to such extent as
7) If the truth of the cause is denied, it must be will not impair the legitime. (Vitug, Civil Law
Proved by the proponent. (Art. 917) Volume III, 2006 edition, p. 263)
Effects of Disinheritance
• Total exclusion of the compulsory heir from
the inheritance, which includes his legitime,
his share in the intestate portion, and any
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e) This ground also applies to disinheritance

INEFFECTIVE PRETERITION of parents, ascendants, and spouse.
DISINHERITANCE 3) When a child or descendant has been
Person disinherited The person omitted convicted of adultery or concubinage with the
may be any must be a compulsory spouse of the testator;
compulsory heir heir in the direct line a) Final conviction is required.
Express Implied b) There must be a valid marriage between
Intentional Either intentional or the spouse and the testator.
unintentional c) This ground also applies to disinheritance
Partial annulment of Effect: Total annulment of parents and ascendants. (Balane,
institution of heirs of institution of heirs supra)
4) When the child or descendant, by fraud,
Preterition is total omission from the inheritance, violence, intimidation, or undue influence,
without the heir being expressly disinherited. The causes the testator to make a will or to change
implied basis of the rule on preterition is one already made;
inadvertent omission by the testator. Thus, if the 5) A refusal without justifiable cause to support
testator explicitly disinherits the heir, Article 854 on the parent or ascendant who disinherits such
preterition will not apply. Should the disinheritance child or descendant;
be ineffective, for absence of one or other of the a) The obligation to support must be proven.
requisites for a valid disinheritance, the heir is b) There must be a need and demand for
simply entitled to demand his rightful share. support.
(Balane, supra) c) The demand must be unjustifiably
refused.
GROUNDS FOR DISINHERITANCE d) This ground also applies to disinheritance
of parents, ascendants, and spouses
Grounds for Disinheritance of Legitimate or
Illegitimate Children and Descendants (Art. NOTE: Refusal may be justified, if the obligor
919) does not have enough resources for all whom
1) When the child or descendant has been found he is obliged to support. The ascendants are
guilty of an attempt against the life of the only third in the hierarchy of preference
testator, his or her spouse, descendants, or among claimants of support. (Family Code,
ascendant; Art. 200, par. 3)
a) Final conviction is required.
b) It includes all stages of commission of a 6) Maltreatment of the testator by word or deed,
crime. (Attempted, frustrated, or by the child or descendant;
consummated) a) The verbal or physical assault must be of
c) This ground also applies to disinheritance a serious nature.
of parents, ascendants, and spouse. b) No conviction is required. It is not even
d) Felony must be intentional (not through required that a criminal case be filed.
negligence)
2) When a child or descendant has accused the By word – Slander, offensive language,
testator of a crime for which the law prescribes insult, libel. May be spoken or written.
imprisonment for six years or more, if the By deed – No need for violence. It could be
accusation has been found groundless; something which caused the testator to be
a) It includes filing of a complaint before the humiliated.
prosecutor, or presenting incriminating
evidence against the testator, or even 7) When a child or descendant leads a
suppressing exculpatory evidence. dishonorable or disgraceful life;
b) It may be made by the heir in a a) The conduct must be habitual. (Balane,
proceeding as a complainant or witness in supra)
a criminal case. 8) Conviction of a crime which carries with it the
c) The testator must be acquitted. penalty of civil interdiction.
d) The accusation must be found to be a) Final conviction is required.
groundless. The judgment of acquittal b) The accessory penalty of civil interdiction
must state either no crime was committed is imposed with the principal penalties of
or that the accused did not commit the death, reclusion perpetua, and reclusion
crime. An acquittal on reasonable doubt temporal. (Balane, supra)
will not be a ground of disinheritance. NOTE: The enumeration is exclusive.
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• No conviction is required.
Grounds for Disinheritance of Legitimate or 7) The refusal to support the children or
Illegitimate Parents or Ascendants (Art. 920) descendants without justifiable cause;
1) When the parents have abandoned their 8) An attempt by one of the parents against the
children or induced their daughters to live a life of the other, unless there has been a
corrupt or immoral life, or attempted against reconciliation between them.
their virtue; a) Final conviction is not required.
a) Includes all conduct constituting a b) It includes all stages of commission of a
repeated or total refusal or failure to care crime. (Attempted, frustrated, or
for a child. consummated)
b) This applies when the parents willfully left c) Even if parents are not married, it is still a
the children to fend for themselves. ground. The parents do not need to be
c) It is not restricted to those instances of spouses. However, the testator must be a
abandonment penalized by law. common child.
d) Inducement- same as deprivation of d) Reconciliation between the parents
parental authority; only applies to female removes the right of a child or descendant
descendants to disinherit and rescinds a disinheritance
e) Attempt on virtue- no conviction is already made.
required NOTE: The enumeration is exclusive.
2) When the parent or ascendant has been
convicted of an attempt against the life of the Grounds for Disinheritance of a Spouse (Art.
testator, his or her spouse, descendants, or 921)
ascendants; 1) When the spouse has been convicted of an
3) When the parent or ascendant has accused attempt against the life of the testator, his or
the testator of a crime for which the law her descendants, or ascendants;
prescribes imprisonment for six years or 2) When the spouse has accused the testator of
more, if the accusation has been found to be a crime for which the law prescribes
false; imprisonment of six years or more, and the
4) When the parent or ascendant has been accusation has been found to be false;
convicted of adultery or concubinage with the 3) When the spouse by fraud, violence,
spouse of the testator; intimidation, or undue influence cause the
5) When the parent or ascendant by fraud, testator to make a will or to change one
violence, intimidation, or undue influence already made;
causes the testator to make a will or to change 4) When the spouse has given cause for legal
one already made; separation;
6) The loss of parental authority for causes a) A decree of legal separation is not
specified in this Code; required.
• It refers to culpable loss of parental b) The grounds for legal separation need not
authority and excludes attainment of age be proven, unless contested by the heir.
of majority. (Balane, supra) The causes c) If there is already a decree of legal
for culplable loss of parental authority separation, the ground is conclusive, but
include: there is still a need to disinherit by will.
a) judicial deprivation of parental 5) When the spouse has given grounds for the
authority on the ground of sexual loss of parental authority;
abuse; • Judicial decree is not required. Giving
b) loss of parental authority as a result of grounds therefore is sufficient. (Art. 921)
judicial declaration of abandonment of 6) Unjustifiable refusal to support the children or
the child the other spouse.
c) judicial deprivation of parental NOTE: The enumeration is exclusive.
authority based on:
i) excessively harsh or cruel Revocation of Disinheritance
treatment of the child 1. Reconciliation (Art. 922)
ii) giving the child corrupting orders, 2. Subsequent institution of the disinherited heir.
counsel or example 3. Nullity of the will, which contains the
iii) compelling the child to beg; or disinheritance.
iv) subjecting the child or allowing
him to be subjected to acts of
lasciviousness
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Reconciliation
This refers to the resumption of genuine cordial
relationship between the testator and the
disinherited heir, approximating that which
prevailed before the testator learned of the cause
for disinheritance, reciprocally manifested by their
actions subsequent to the act of disinheritance.
(Vitug, supra, p. 264)
Reconciliation may be done by:

1) Concrete and express pardon extended to the
offender, who accepts it.
A general pardon extended by the testator on
his deathbed to all who have offended him will
not suffice.
2) Unequivocal conduct toward the offending
heir, by which the intent to forgive must be
clear.
OCCURRED BEFORE OCCURRED

DISINHERITANCE IS AFTER
MADE DISINHERITANCE
IS MADE
Right to disinherit is Disinheritance is set
extinguished aside. (Art. 922)
Effects of Setting Aside the Disinheritance

1) The disinherited heir is restored to his
legitime.
2) If the disinheriting will did not dispose of the
disposable portion, the disinherited heir is
entitled to his proportionate share, if any.
3) If the disinheriting will or any subsequent will
disposed of the disposable portion in favor of
testamentary heirs, legatees or devisees,
such dispositions remain valid.
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Summary of Grounds for Disinheritance (Arts. 919, 920 & 921)
GROUND CHILD/ PARENT/ SPOUSE

DESCENDANT ASCENDANT
Attempt against the life of the testator, √ √ √
spouse, ascendant, descendant
Accusation of a crime with penalty of six √ √ √
years
Adultery and Concubinage with the N/A
spouse of testator
Induce testator to make/change the will. √ √ √
Support unjustifiably refused √ √ Unjustifiable refusal to

support the children or
the other spouse
Maltreatment of the testator by word or √ N/A N/A
deed
Leading a dishonorable or disgraceful √ N/A N/A
life
Conviction of a crime which carries with √ N/A N/A
the penalty of civil interdiction
Abandonment of Children, Inducement N/A N/A
to live a corrupt or moral life, or
attempted against their virtue
Loss of parental authority N/A It is sufficient that the
spouse has given
grounds for loss of
parental authority
Attempt by one Parent against the Life of N/A N/A
the Other
Giving Cause for Legal Separation N/A N/A
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7. LEGACIES AND DEVISES

EXTENT OF LIABILITY
Legacy – Testamentary disposition of personal LEGATEE / DEVISEE HEIR
property by particular title. (Balane, supra) If charged with a If charged with a
legacy or devise, he or legacy or devise, he
Devise – Testamentary disposition of real she shall be liable only or she shall not be
property by particular title. (Balane, supra) for the extent of the liable beyond the
value of the legacy or amount of the free
HEIR LEGATEE / DEVISEE devise received. portion given to him.
One who succeeds to Those who succeed (Arts. 925-926; Tolentino, supra)
the whole or a to definite, specific,
fractional part of the and individual NOTE: Since legacies and devises are to be taken
inheritance properties from the disposable free portion of the estate, the
(Balane, supra) provisions on institution of heirs are generally
applicable to them.
Things And Rights Which May Be Bequeathed
of Devised When Two Or More Heirs Take Possession Of
All things and rights which are within the The Estate
commerce of man may be bequeathed or devised. If two or more heirs take possession of the estate,
(Art. 924) they shall be solidarily liable for the loss or
destruction of a thing devised or bequeathed, even
NOTE: It is not required that the thing devised or though only one of them should been negligent.
bequeathed belong to the testator. Also, it must (Art. 927)
not impair the legitimes.
Liability for Eviction
Persons Who May Be Charged With Legacies General Rule: The estate is liable for eviction.
And Devises Exception: In case of a subsidiary legacy or
A testator may charge with legacies and devises devise, the heir, legatee or devise charged shall
not only his compulsory heirs but also the legatees be liable in case of eviction, if the thing is
and devisees. (Art. 925) indeterminate and is indicated only by its kind. (Art.
928)
General Rule: Estate is charged with the legacy
or devise. Thing Owned In Part By Testator
Exception: Subsidiary legacy or devise General Rule: Conveys only interest or part
(Paras, Civil Code of the Philippines Annotated, owned by testator (Art. 929)
2016) Exception: If testator otherwise provides
1) He may convey more than what he owns and
Subsidiary legacy or devise – When the testator the estate should try to acquire the part or
imposes the burden on an heir or a legatee or interest owned by other parties. If other
devisee; the heir, legatee, or devisee charged will parties are unwilling to alienate, the estate
be bound to deliver the legacy or devise to the should give the legatee/devise the monetary
person specified. As far as the heir, legatee, or equivalent. (by analogy with Art. 931)
devisee charged is concerned, it will be a mode. 2) He may convey less than what he owns. (Art.
(Balane, supra) 794)
Where the will is silent as to who shall pay or Thing Owned by Another (Arts. 930-931)
deliver the legacy/devise: 1) If the testator orders acquisition of the thing –
1. If there is an administration proceeding, there The order should be complied with. If the
is a presumption that such legacy or devise owner is unwilling to part with the thing, the
constitutes a charge against the decedent’s legatee/devisee should be given the monetary
estate (Paras, supra, 2016) equivalent. (Art. 931)
2. If there are no administration proceedings, it
is a charge upon the heirs, in the same 2) If the testator erroneously believed that the
proportion in which they may inherit. (Art. 926, thing belonged to him –The legacy/devise is
par. 2) void.
Exception: If subsequent to the making of the
disposition, the thing is acquired by the
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testator onerously or gratuitously, the The same rule applies when the thing is pledged
disposition is validated. (Art. 930) or mortgaged after the execution of the will. (Art.
934, par. 2)
3) If the testator knew that the thing did not
belong to him but did not order its acquisition Any other charge, perpetual or temporary, with
– The disposition should be considered valid. which the thing bequeathed is burdened, passes
There is an implied order to acquire the with it to the legatee or devisee. (Art. 934, par. 3)
property. (Paras, supra)
Legacy / Devise Subject to a Usufruct
Thing Already Owned by the Legatee/Devisee If the thing bequeathed should be subject to a
(Arts. 932-933) usufruct, the legatee or devisee shall respect such
1) If thing already belonged to legatee/devisee at right until it is legally extinguished. (Art. 946)
time of execution of will – The legacy/devise
is void even if legatee/devisee alienates the Legacy of Credit or Remission (Art. 935-937)
property subsequently unless the acquirer is 1) Applies only to the amount still unpaid at the
the testator himself. (Balane, supra citing time of testator’s death. (Art. 935);
Manresa) 2) Revoked if testator subsequently sues the
debtor for collection. (Art. 936);
2) If thing was owned by another person at time 3) If generic, applies only to those existing at the
of making the will and thereafter it is acquired time of the execution of the will, unless
by legatee/devisee: otherwise provided. (Art. 937 and 793)
a. If testator erroneously believed that he
owned the thing – The legacy/devise Legacy / Devise to a Creditor (Art. 938)
is void. A legacy or devise made to a creditor shall not be
b. If testator knew that he did not own the applied to his credit, unless the testator so
thing: expressly declares.
i. If thing was acquired onerously
by legatee/devisee – The If the testator provides that the devise or legacy
legatee/devisee is entitled to will be imputed to the debt, and if the debt exceeds
reimbursement. the legacy or devise, the excess may be
ii. If thing was acquired gratuitously demanded as an obligation of the estate.
by legatee/ devisee – Nothing
more is due. Testamentary Instruction to Pay a Debt (Art.
939)
3) If thing was owned by testator at time will was INSTRUCTION INSTRUCTION TO PAY
made and the legatee/devisee acquired the TO PAY A NON- MORE THAN WHAT IS
thing from the testator —The legacy/devise EXISTING DEBT DUE
should be deemed revoked The disposition The instruction should be
should be effective only as to what
Legacy / Devise to Remove an Encumbrance considered as not is due, unless the
Over a Thing Belonging to the Testator (Art. written. contrary intention
932, par. 2) appears.
If the testator expressly orders that the thing be
freed from such interest or encumbrance, the Alternative Legacies or Devises – One which
legacy or devise shall be valid to that extent. provides that among several things mentioned,
only one is to be given.
NOTE: The legacy / devise is valid, if the
encumbrance can be removed for a consideration. General Rule: The choice is left to the:
1) Direct legacy or devise – Estate, through the
Legacy / Devise of a Thing Pledged or executor or administrator;
Mortgaged (Art. 934) 2) Subsidiary legacy or devise – Heir, legatee,
If the testator should bequeath or devise devisee charged (Tolentino, supra)
something pledged or mortgaged to secure a
recoverable debt before the execution of the will, Exception: If the testator provides that the legatee
the estate is obliged to pay the debt, unless the or devisee himself may choose, or that a third
contrary intention appears. party may choose. (Art. 942)
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If the person who shall make the choice dies whichever comes later. In the latter instance, only
before the choice is made: (Art. 940, par. 2) if the legatee pursues his studies diligently.
1) If the choice belonged to the executor or
administrator – The right is transmissible to Amount (Art. 944, par. 3)
his successor in office; 1) The amount fixed by the testator; or
2) If the choice belongs to an heir, legatee, or 2) That which is proper, as determined by:
devisee – The right is transmitted to his own a) The social standing and circumstances of
heirs. the legatee, and
NOTE: The choice is irrevocable. (Art. 940, par. 3) b) The value of the disposable portion of the
estate.
Generic Legacies or Devises
RULES ON VALIDITY (Art. 941) Legacy for Support (Art. 944)
GENERIC LEGACY GENERIC DEVISE Duration – During the lifetime of the legatee,
Valid even if no such Valid only if there unless the testator provided otherwise
movable exists in the exists such an
estate upon the immovable in the Amount (Art. 944, par. 3-4)
testator’s death. The estate at the time of 1) The amount fixed by the testator; or
estate will simply have the testator’s death 2) That which the testator, during his lifetime,
to acquire what is used to give the legatee by way of support,
given by legacy. unless markedly disproportionate to the value
of the disposable portion.
Right of Choice in Generic Legacies or Devises 3) That which is reasonable, as determined by:
(Art. 941-943) a) The social standing and circumstances of
General Rule: The executor or administrator, the legatee, and
acting for the estate. b) The value of the disposable portion of the
Exception: When the testator expressly leaves estate.
the right of choice to the heir, or the legatee or
devisee, on whom the obligation to give is Legacy of a Periodical Pension
imposed. (Subsidiary legacy or devise). If a periodical pension, or a certain annual,
monthly, or weekly amount is bequeathed, the
Limitation on choice legatee may petition the court for the first
The persons who have the right of choice shall installment upon the death of the testator, and for
comply with the legacy by the delivery of a thing the following ones which shall be due at the
which is neither of inferior nor of superior quality. beginning of each period; such payment shall not
(Art. 941) be returned, even though the legatee should die
before the expiration of the period which has
If the person who shall make the choice cannot do commenced. (Art. 945)
so:
1) If the choice belonged to the executor or DEMANDABILITY, OWNERSHIP, AND
administrator – The right is transmissible to FRUITS
his successor in office; PURE AND WITH A SUSPENSIVE
2) If the choice belongs to an heir, legatee, or DETERMINATE TERM OR CONDITION
devisee – The right is transmitted to his own OR GENERIC
heirs. Upon the Upon the arrival of the
testator’s death term or upon the
NOTE: The choice is irrevocable. (Art. 940) happening of the
condition, as the case
If the person to whom the testator has expressly may be
given the right to choose does not exercise his (Art. 947; Paras, supra)
right, it shall be understood that he has renounced
it and the person obliged to pay the legacy or When Ownership Vests
devise may deliver any of the things designated, 1) Pure and determinate property – Upon
provided it is not of the lowest or of the highest testator’s death
quality. (Tolentino, supra) 2) Pure and generic property –
a) If the property came from the testator’s
Legacy for Education (Art. 944) estate – Upon testator’s death
Duration – Age of majority or the completion of a b) If the property is acquired from a third
professional, vocation, or general course person – Upon acquisition
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3) Devises or legacies with a suspensive term – Possession of the Thing Bequeathed

Upon arrival of the term, but the right to it vests The legatee or devisee cannot take possession of
upon the testator’s death the thing bequeathed upon his own authority, but
4) Devises or legacies with a suspensive shall request its delivery and possession of the
condition – Upon the testator’s death, if the heir charged with the legacy or devise, or of the
condition is fulfilled. (Art. 948; Paras, supra) executor or administrator of the estate should he
be authorized by the court to deliver it. (Art. 953)
Fruits
1) Pure and determinate property – Upon Order of Preference in Case Estate is
testator’s death Insufficient to Cover all Legacies and Devices
2) Pure and generic property – Upon (Art. 950)
determination, unless the testator provides If the estate should not be sufficient to cover all the
otherwise legacies or devises, their payment shall be made
3) Devises or legacies with a suspensive term – in the following order:
Upon arrival of the term 1) Remuneratory legacies or devises;
4) Devises or legacies with a suspensive 2) Legacies or devises declared by the testator
condition – Upon the happening of the to be preferential;
condition, unless the testator provides 3) Legacies for support;
otherwise (Art. 948; Paras, supra) 4) Legacies for education;
5) Legacies or devises of a specific, determinate
NOTE: If the legacy or devise is of a specific and thing which forms a part of the estate;
determinate thing pertaining to the testator, the 6) All others, pro-rata.
legatee or devisee do not acquire the income
which was due and unpaid before the testator’s REDUCTION OF ORDER OF
death. (Art. 948) LEGACIES AND PREFERENCE OF
DEVISES DEVISES AND
From the moment of the testator’s death, the (ART. 911) LEGACIES
specific and determinate thing bequeathed shall (ART. 950)
be at the risk of the legatee or devisee, who shall Non-preferred In the order of
bear its loss or deterioration, and shall be legacies or devises preference, the last is
benefited by its increase or improvement, without will be reduced pro- to be reduced first and
prejudice to the responsibility of the executor or rata and the preferred the first is to be
administrator. (Art. 948) legacies or devises reduced last.
Obligation to Deliver the Thing Bequeathed will be reduced last.
The thing bequeathed shall be delivered with all its Applies when the Applies when the
accessories and accessories and in the condition legitimes have been reduction is due to
in which it may be upon the death of the testator. impaired reasons other than
(Art. 951) impairment of
legitimes
The heir, charged with a legacy or devise, or the
executor or administrator of the estate, must Rules on Acceptance and Repudiation of
deliver the very thing bequeathed if he is able to Devices or Legacies
do so and cannot discharge this obligation by General Rule: Acceptance may be total or partial.
paying its value. (Art. 952, par. 1) (Art. 954)
Exception: If the legacy or devise is partly
Legacies of Money Paid in Cash onerous and partly gratuitous, the recipient cannot
Legacies of money must be paid in cash, even accept the gratuitous part and renounce the
though the heir or the estate may not have any. onerous part. Any other combination is permitted.
(Art. 952, par. 2) (Art. 954)
Necessary Expenses for the Delivery of the Acceptance or Repudiation by Heirs of

Thing Bequeathed Legatee or Devisee (Art. 954, par. 2)
The expenses necessary for the delivery of the If the legatee or devisee dies before accepting or
thing bequeathed shall be for the account of the renouncing the devise or legacy, his heirs shall
heir or the estate, but without prejudice to the exercise such right as to their pro-indiviso share,
legitime. (Art. 952 par. 3) applying the rules in Article 954.
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TWO LEGACIES / DEVISES TO THE SAME 3) Total Loss: If the thing bequeathed or
RECIPIENT (ART. 955) devised is totally lost during the lifetime of the
BOTH ARE ONE IS GRATUITOUS testator, or after his death without the heir’s
GRATUITOUS AND THE OTHER IS fault. (Art. 957)
OR ONEROUS ONEROUS
The recipient may The recipient cannot 4) If the legacy is a credit against a third person
accept or accept the gratuitous and or the remission of a debt, and the testator,
renounce either or renounce the onerous. subsequent to the making of the will brings an
both. Any other combination is action against such debtor for payment. (Art.
permitted. 936)
Legacy or Devise to a Compulsory Heir Mistake in the Name of the Thing Bequeathed
Any compulsory heir who is at the same time a or Devised
legatee or devisee may waive the inheritance and A mistake as to the name of the thing bequeathed
accept the legacy or devise, or renounce the latter or devised, is of no consequence, if it is possible
and accept the former, or waive or accept both. to identify the thing which the testator intended to
(Art. 955 par. 2) bequeath or devise. (Art. 958)
NOTE: For acceptance and repudiation of devices
or legacies, the testator’s wishes are supreme. All C. LEGAL AND INTESTATE SUCCESSION
the rules apply in the absence of stipulation
providing otherwise. (Balane, supra) 1. GENERAL PROVISIONS;
RELATIONSHIP AND RIGHT OF
Repudiation by or Incapacity of Legatee or REPRESENTATION
Devisee (Art. 956)
If the legatee or devisee cannot or is unwilling to
Legal or Intestate Succession – Takes place by
accept the legacy or devise, or if the legacy or
operation of law in the absence of a valid will.
devise for any reason should become ineffective,
(Paras, supra)
the following steps apply:
1. Follow substitution, if any.
Instances when Legal or Intestate Succession
2. Then accretion,
Operates (Art. 960)
3. Lastly, intestacy as it shall be merged to the
1. If a person dies without a will, or with a void
mass of the estate.
will, or one which has subsequently lost its
validity;
When Legacy/Devise can be Revoked by
2. When the will does not institute an heir to, or
Operation of Law
dispose of all the property belonging to the
1) Transformation: If the testator transforms the
testator. In such case, legal succession shall
thing bequeathed or devised in such a manner
take place only with respect to the property of
that it does not retain its form and
which the testator has not disposed;
denomination. (Art. 957)
3. If the suspensive condition attached to the
institution of heir does not happen or is not
2) Alienation: If the testator, by any title or for
fulfilled, or if the heir dies before the testator,
any cause, alienates the thing bequeathed or
or repudiates the inheritance, there being no
devised or any part thereof. (Art. 957)
substitution, and no right of accretion takes
place;
NOTE: The alienation revokes the legacy or
4. When the heir instituted is incapable of
devise even if for any reason the thing reverts
succeeding, except in cases provided in the
to the testator (e.g. nullity of the contract)
Civil Code.
(Paras, supra)
Exceptions:
Other Causes of Intestacy (Tolentino, supra)
(a) If the reversion is caused by the
1) Happening of a resolutory condition;
annulment of the alienation and the cause
2) Expiration of a resolutory term;
for annulment was vitiation of consent on
3) Preterition (Balane, supra)
the grantor’s part, either by reason of
incapacity or of duress. (Fernandez v.
NOTE: Intestacy operates on the same principles
Dimagiba, G.R. No. L-23638, 1967)
as succession to the legitime. They are both
(b) If the reversion is by virtue of redemption
governed by the rules on exclusion and
in a sale with pacto de retro.
concurrence.
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Four Basic Rules of Intestacy a. Relationship

1) Rule of Relationship – the heirs must be
related to the decedent. Proximity of relationship is determined by the
number of generations. (Art. 963)
Four Kinds of Relationships
a) Ascendants and Descendants; Degree – One generation
b) Collaterals;
c) Marriage; Computation of Degrees
d) State of sovereign 1. Direct line – No legal limit to the number of
degrees for entitlement to intestate
2) Rule of Preference of Lines – the succession.
descending line excludes the ascending and 2. Collateral line – Intestate succession extends
the collateral, and the ascending excludes the only to the fifth degree of collateral
collateral. (Art. 965) relationship (Art. 1010)
Three lines of relationship Line – Series of degrees, which may be direct or

a) Descending line collateral
b) Ascending line (a) Direct line – Constituted by the series of
c) Collateral line degrees among ascendants and
descendants
3) Rule of Proximity of Degree – the nearer i. Descending line – Unites the head of the
exclude the more remote, without prejudice to family with those who descend from him
representation. (Art. 962, par. 1) ii. Ascending line – Binds a person with
those from whom he descends
The rule on proximity is a concept that favors the In the direct line, ascend to the common
relatives nearest in degree to the decedent and ancestor.
excludes the more distant ones except when and There is no legal limit to the number of
to the extent that the right of representation can degrees for entitlement to intestate
apply… Respondent, being a relative within the succession
third civil degree, of the late Augusto H. Piedad (b) Collateral line – Constituted by the series of
excludes petitioner, a relative of the fifth degree, degrees among persons who are not
from succeeding an intestato to the estate of the ascendants and descendants, but who come
decedent. (Bagunu v. Piedad, G.R. No. 140975, from a common ancestor
08 December 2000) In the collateral line, ascend to the common
ancestor and then descend to the person with
4) Rule of Equality Among Relatives of the whom the computation is to be made.
Same Degree – the nearer exclude the more Intestate succession extends only to the 5th
remote, those of equal degree should inherit degree of collateral relationship.
in equal shares. (Art. 962, par. 2)
Full Blood Relationship
Exceptions to the Rule of Equality in the Same Full blood relationship is that existing between
Degree persons who have the same father and the same
1) The rule of preference of lines; mother. (Art. 967, par. 1)
Note: The direct line is preferred over the
collateral, even if they are of the same Half Blood Relationship
degree Half-blood relationship is that existing between
2) The distinction between legitimate and persons who have the same father, but not the
illegitimate filiation; same mother, or the same mother, but not the
3) The rule of division by line in the ascending same father. (Art. 967, par. 2)
line;
4) The distinction between full-blood and half- Importance of Distinction Between Full Blood
blood relationship among brothers and and Half Blood Relationship (Arts. 1006, 1008)
sisters, as well as nephews and nieces; Ratio of 2:1 for full-blood and half-blood
5) Representation; and relationship in Articles 1006 and 1008, for brothers
6) Concurrence of nephews and nieces and and sisters and nephews and nieces.
uncles and aunts (Paras, supra)
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ACCRETION IN INTESTACY The effect of renunciation by all in the same

If there are several relatives of the same degree, degree applies in cases of predecease or
and one or some of them are unwilling or incapacity by all in the same degree, except in
incapacitated to succeed, his portion shall accrue cases where representation is proper.
to the others of the same degree, save the right of
representation when it should take place. (Art. b. Right of Representation
968)
Representation - a right created by fiction of law,
Accretion applies among heirs of the same by virtue of which the representative is raised to
degrees in the following instances: (Arts. 1015, the place and the degree of the person
1016) represented, and acquires the rights which the
1) Predecease; latter would have if he were living or if he could
2) Incapacity; have inherited. (Art. 970; Tumbokon v. Legaspi,
3) Renunciation G.R. No. 153736)
HOWEVER, in case of predecease or incapacity, In order that representation may take place, it is
representation, if proper, will prevent accretion necessary that the representative himself be
from occurring. (Balane, supra) capable of succeeding the decedent. (Art. 973)
Relatives must be in the same kind of relationship Representation only applies in compulsory and
for accretion to take place. This is because of the intestate succession in the direct descending line
principle of preference of lines in intestate (Art. 972) and in one instance in the collateral line
succession. (Balane, supra) in the case of nephews and nieces representing
brothers and sisters of the deceased (Art. 975)
RENUNCIATION IN INTESTACY
If the inheritance should be repudiated by the In the collateral line, the right of representation
nearest relative, should there be one only, or by all extends no further than the nephews and nieces.
the nearest relatives called by law to succeed, Grandnephews and grandnieces are not entitled
should there be several, those of the following to inherit by right of representation in the collateral
degree shall inherit in their own right and cannot line. (In re: Intestate Estates of Delgado & Rustia
represent the person or persons repudiating the v. Heirs of Vda. De Damian, G.R. No. 155733)
inheritance. (Art. 969)
NOTE: There is no representation in testamentary
Effect of Renunciation by All in the Same succession and in any type of succession in the
Degree direct ascending line. (Paras, supra)
The right of succession should first be passed on
the heirs in succeeding degrees, before the next Instances When Representation Operates
line can succeed. (PID)
1. The descending line inherits first. 1) Predecease;
2) Incapacity or unworthiness;
NOTE: If ALL the descendants of a certain 3) Disinheritance (Paras, supra)
degree renounce, succession passes to the
descendants of the next degree, and so on. NOTE: Representation does not apply in
renunciation. (Art. 977)
2. The ascending line inherits next.
Right of Representation of Illegitimate
NOTE: Should no one be left in the Children (Art. 902)
descending line, the heirs in the ascending The rights of illegitimate children set forth in the
line acquire the right of succession, in order of articles on legitimes and intestate succession are
degrees of proximity. transmitted upon their death to their descendants,
whether legitimate or illegitimate.
3. The collateral line inherits last.
NOTE: Only if all the descendants and

ascendants renounce will the collateral
relatives acquire the right to succeed.
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Right of representation by representation. inherit from the

DECEDENT IS A (Art. 982) deceased by
DECEDENT IS AN
LEGITIMATE representation.
ILLEGITIMATE CHILD
CHILD
The right of The right of If all their uncles and
representation is representation is aunts are disqualified
given only to granted to both from inheriting
legitimate legitimate and (predeceased,
descendants. illegitimate incapacitated or
descendants. unworthy,
(Art. 992) disinherited), they
inherit in equal
Representation of and by an Adopted Child portions. (Art. 975)
An adopted child can neither represent nor be
represented. (Balane, supra at p. 484)
2. ORDER OF INTESTATE
An adopted child cannot represent his/her adopter SUCCESSION
in the estate of his/her adopter’s grandparents
because the relationship between the adopter and
Intestate Heirs (Paras, supra)
the adopted does not go beyond their relatives of
1) Legitimate Children or Descendants (Art. 979)
either party. (Teotico v. Del Val, G.R. No. L-18753)
2) Illegitimate Children or Descendants (Art. 988,
990, 992)
Nonetheless, an adopted child succeeds to the
3) Legitimate Parents or Ascendants (Art. 986)
property of the adopting parents in the same
4) Parents of Illegitimate Children (Art. 993)
manner as a legitimate child. (Art. 979, par. 2)
5) Surviving Spouse (Art. 994)
6) Brothers, Sisters, Nephews, Nieces (Arts.
Representation by a Renouncer
1004-1008)
A renouncer cannot be represented; however, he
7) Other Collateral up to the fifth degree (Art.
can represent the person whose inheritance he
1009)
has renounced. (Art. 976)
8) State (Art. 1011)
Operation of Representation
Rules of Exclusion and Concurrence
Per stirpes – The representative or
1) Legitimate Children or Descendants (Arts.
representatives receive only what the person
978-982)
represented would have received. If there are
a) Exclude parents, collaterals, and the
more than one representative in the same degree,
State
then the portion is divided equally, without
b) Concur with surviving spouse, and
prejudice to the distinction between legitimate and
illegitimate children or descendants
illegitimate children, when applicable. (Balane,
c) Excluded by no one
supra)
2) Illegitimate Children or Descendants (Arts.
Rules to Qualify as a Representative
983, 988-994)
1) The representative must be qualified to
a) Exclude parents of illegitimate children,
succeed the decedent. (Art. 973)
collaterals, and the State;
2) The representative need not be qualified to
b) Concur with surviving spouse, legitimate
succeed the person represented. (Art. 971)
children, and legitimate parents;
3) The person represented need not be qualified
c) Excluded by no one
to succeed the decedent.
NOTE: The representative does not succeed the
3) Legitimate parents (Arts. 985-986)
person represented but the one whom the person
a) Exclude collaterals and the State;
represented would have succeeded. (Art. 971)
b) Concur with illegitimate children and the
surviving spouse;
Representation
c) Are excluded by legitimate children
BY BY NEPHEWS AND
GRANDCHILDREN NIECES
4) Parents of illegitimate children (Arts. 993-
If all children are If they survive with
994)
disqualified, the their uncles and
a) Exclude collaterals and the State;
grandchildren inherit aunts, they shall
b) Concur with the surviving spouse;
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c) Excluded by legitimate children and and 209018, Dec. 7, 2021), where the court ruled
illegitimate children that grandparents and direct ascendants fall
outside the scope of “relatives” under Art. 992. 1
5) Surviving spouse (Arts. 995-1002)
a) Excludes collaterals other than brothers, Person to be Represented
sisters, nephews, nieces, and the State; ILLEGITIMATE LEGITIMATE CHILD
b) Concur with legitimate children, CHILD
illegitimate children, legitimate parents, His or her Only his or her
parents of illegitimate children, brothers, descendant whether legitimate
sister, nephews and nieces; legitimate or descendants can
c) Excluded by no one illegitimate, may represent him, his or
represent him. her illegitimate
6) Brothers and sisters, nephews and nieces descendants cannot
(Arts. 1003-1008) represent him. (Vda.
a) Exclude all other collaterals and the De Crisologo v. Cam
State; G.R. No. L-44051,
b) Concur with the surviving spouse; 1985)
c) Excluded by legitimate children,
illegitimate children, legitimate parents, Partial Intestacy (Balane, supra)
and parents of illegitimate children Where a decedent left a will disposing of a part,
but not all, of the disposable portion, the following
7) Other collaterals up to the fifth degree steps may solve the problem:
(Arts. 1009-1010) 1. Trace where the free portion went in total
a) Exclude collaterals in more remote intestacy.
degree and the State; 2. The testamentary provision should be carried
b) Concur with collaterals in the same out first, then what is left of the free portion
degree; should then be given to the intended
c) Excluded by legitimate children, beneficiary in intestacy. (Balane, supra)
illegitimate children, legitimate parents,
parents of illegitimate children, surviving
spouse, brothers and sisters, nephews
and nieces;
8) State (Arts. 1011-1014)

a) Excludes no one;
b) Concurs with no one;
c) Excluded by everyone
Iron Curtain Rule / Barrier Principle /

Principle of Absolute Separation
An illegitimate child has no right to inherit ab
intestato from the legitimate children and relatives
of his father or mother; nor shall such children or
relatives inherit in the same manner from the
illegitimate child. (Art. 992)
The right of representation is not available to

illegitimate descendants of legitimate children in
the inheritance of a legitimate grandparent. (Diaz
v. Intermediate Appellate Court, G.R. No. L-
66574, Feb. 21, 1990)
NOTE: The above ruling in Diaz no longer applies

considering Aquino v. Aquino, (G.R. Nos. 208912
1
Note that this December 7, 2021 decision was released
beyond the cut-off date of June 30, 2021, for Bar
coverage.
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COMBINATIONS OF LEGITIMES AND INTESTATE SUCCESSION

(Arts. 888-889, 892-901, 903, 983, 986-987, 991, 993-1001, 1004-1008, 1011)
HEIRS LEGITIME INTESTACY TOTAL

Legitimate Children 1/2 divided equally 1/2 divided equally Whole estate divided equally
Alone
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided among
Illegitimate Children be divided among them, observing the 2:1 ratio
ILC – 1/2 of share of 1 LC
them, observing
the 2:1 ratio
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided equally
Surviving Spouse be divided among
Spouse – Share of 1 LC
them equally
One Legitimate Child LC – 1/2 1/4 goes to the LC – 1/2
and Surviving Spouse spouse
Spouse – 1/4 Spouse – 1/2
Legitimate Children, LC – 1/2 Residue left shall Whole estate divided among
Surviving Spouse, Spouse – share of 1 LC be divided among them, observing the 2:1 ratio
Illegitimate Children them, observing
ILC – 1/2 of share of 1 LC
the 2:1 ratio
Legitimate Parents LP – 1/2 1/2 goes to the Whole estate divided equally
Alone parents
Legitimate Ascendants 1/2 1/2 Whole estate divided among
Other than Parents them, observe rules in
proximity in degree, and
division by line
Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2
Illegitimate Children illegitimate children
ILC – 1/4 ILC – 1/4
Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2

Surviving Spouse spouse
Legitimate Parents, LP – 1/2 1/8 goes to the LP – 1/2

Surviving Spouse, and ILC – 1/4 spouse ILC – 1/4
Illegitimate Children
Illegitimate Children ILC – 1/2 1/2 goes to Whole estate divided equally
Alone illegitimate children
Illegitimate Children ILC – 1/3 1/6 goes to ILC – 1/2
and Surviving Spouse illegitimate children
Spouse – 1/3 1/6 goes to spouse Spouse – 1/2
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(continuation)
Surviving Spouse 1/2 Residue goes to the Whole estate goes to the spouse
Alone 1/3 if marriage is spouse
in articulo mortis
Surviving Spouse Spouse – 1/4 1/ 4 goes to the Spouse 1/2
and Parents of spouse
Illegitimate Parents of 1/4 goes to the Parents of Illegitimate Children – ¼
Children Illegitimate parents of illegitimate
Children – 1/4 children
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Legitimate legitimate brothers
Brothers and and sisters, nephews Legitimate brothers and sisters,
Sisters, Nephews and nieces nephews and nieces – 1/2
and Nieces
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Illegitimate illegitimate brothers
Brothers and and sisters, nephews
Legitimate brothers and sisters,
Sisters, Nephews and nieces
nephews and nieces – 1/2
and Nieces
Parents of 1/2 1/2 goes to the Whole estate divided equally
Illegitimate parents of illegitimate
Children Alone children
Parents of Any kind of 1/2 goes to the any Whole estate goes to the children,
Illegitimate children – 1/2, kind of children, observing 2:1 ratio, if applicable
Children and observe 2:1 ratio observe 2:1 ratio Parents of illegitimate children are
Children of Any excluded by all kinds of children
Kind
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(continuation)
Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters Alone full-blood and half-blood siblings
Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters, Nephews and full-blood and half-blood siblings
Nieces Apply rules on representation when proper
Nephews and Nieces N/A Whole estate divided among nephews and nieces, observing the
with Uncles and Aunts 2:1 ratio for full-blood and half-blood siblings
Uncles and aunts of the decedent are excluded. (Bacayo v.
Borromeo)
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters Alone full-blood and half-blood siblings
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters, Nephews full-blood and half-blood siblings
and Nieces
Nephews and Nieces N/A Whole estate divided among them, observing the 2:1 ratio for
Alone full-blood and half-blood siblings
Other Collaterals up to N/A Whole estate divided equally, observe rules in proximity in
the Fifth Degree degree
State N/A (Resident Decedent) (Non-Resident Decedent)
Personal property – Municipality Personal property and real
of the last residence property –Municipality
Real property – Municipality where it is situated
where it is situated
Property is to be used for the benefit of public education and

charitable institutions in the respective municipalities or cities, or
alternatively, at the instance of an interested party, or motu
proprio, court may order creation of a permanent trust for the
benefit of the institutions concerned.
————- end of topic ————-
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D. PROVISIONS COMMON TO TESTATE Co-heirs in the Same Category

AND INTESTATE SUCCESSION The co-heirs in whose favor accretion occurs must
be co-heirs in the same category as the excluded
heir. (Balane, supra)
1. RIGHT OF ACCRETION
Accretion Must be Proportional
Accretion – A right by virtue of which, when two The heirs to whom the portion goes by the right of
or more persons are called to the same accretion take it in the same proportion that they
inheritance, devise or legacy, the part assigned to inherit. (Art. 1019)
the one who renounces or cannot receive his
share, or who died before the testator, is added or General Rule: The heirs to whom the inheritance
incorporated to that of his co-heirs, co-devisees, or accrues shall succeed to all the rights and
co-legatees. (Art. 1015) obligations which the heir who renounced or could
not receive it would have had. (Art. 1020)
Elements of Accretion in Testamentary
Succession (Art. 1016) Exceptions: (Balane, supra)
1) That two or more persons be called to the 1. In testamentary succession, if the testator
same inheritance, or to the same portion, pro provides otherwise;
indiviso; and 2. If the obligation is purely personal, and hence,
2) That one of the persons thus called die before intransmissible
the testator, or renounce the inheritance, or be
incapacitated to receive it. Accretion among Compulsory Heirs
Among the compulsory heirs the right of accretion
Meaning of Pro Indiviso (Balane, supra) shall take place only when the free portion is left to
• Undivided or in common two or more of them, or to any one of them and to
• Either the co-heirs are instituted without a stranger. (Art. 1021)
individual designation of shares; or
• The co-heirs are instituted with the No Accretion in the Legitime
specification that they share equally. If the part repudiated be the legitime, the other co-
• The co-heirs are instituted with unequal heirs shall succeed to it in their own right, and not
fractional shares. by the right of accretion. (Art. 1021)
Instances when Accretion operates in Accretion Subordinate to Substitution in

Testamentary Succession (Balane, supra) Testamentary Succession
1) Renunciation; In testamentary succession, when the right of
2) Predecease; accretion does not take place, the vacant portion
3) Incapacity of the instituted heirs, if no substitute has been
designated, shall pass to the legal heirs of the
NOTE: Provided, only some, not all of the testator, who shall receive it with the same
instituted heirs renounce, predecease, or are charges and obligations (Art. 1022)
incapacitated to succeed. (Balane, supra)
Accretion Among Devisees, Legatees and
Accretion in Intestacy Usufructuaries
In legal succession the share of the person who Accretion shall also take place among devisees,
repudiates the inheritance shall always accrue to legatees and usufructuaries under the same
his co-heirs. (Art. 1018) conditions established for heirs. (Art. 1023)
Occasions for the Operation of Accretion in 2. CAPACITY TO SUCCEED BY WILL

Intestacy (Balane, supra) OR INTESTACY
1) Repudiation or renunciation; (Art. 1018)
2) Predecease, only if representation does not Persons not incapacitated by law may succeed by
take place; will or ab intestato.
3) Incapacity or unworthiness, only if
representation does not take place The provisions relating to incapacity by will are
equally applicable to intestate succession. (Art.
NOTE: In intestacy, accretion is subordinate to 1024)
representation. (Balane, supra)
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NOTE: Both a natural person and a juridical IF INSTITUTION IS

IF INSTITUTION IS
person may inherit. (Art. 1026) SUBJECT TO A
SUBJECT TO A
SUSPENSIVE
SUSPENSIVE TERM
Requisites for Natural Persons CONDITION
In order to be capacitated to inherit, the heir, The successor must The requirement of
devisee or legatee must be living at the moment be living or legally being alive or legal
the succession opens, except in case of existing both when existence applies only
representation, when it is proper. (Art. 1025, par 1) the decedent dies and at the moment of the
A child already conceived at the time of the death when the condition decedent’s death.
of the decedent is capable of succeeding provided happens. (Balane, (Balane, supra)
it be born later under the conditions prescribed in supra)
Article 41 of the Civil Code. (Art. 1025, par 2)
Incapacity to Succeed in Testamentary
Requisites for Juridical Persons Succession (Art. 1027)
A testamentary disposition may be made to the The following are incapable of succeeding:
State, provinces, municipal corporations, private 1) The priest who heard the confession of the
corporations, organizations, or associations for testator during his last illness, or the minister
religious, scientific, cultural, educational, or of the gospel who extended spiritual aid to him
charitable purposes. during the same period;
Requisites:
All other corporations or entities may succeed a) The will must have been executed during
under a will, unless there is a provision to the the testator’s last illness;
contrary in their charter or the laws of their b) The spiritual ministration must have been
creation, and always subject to the same. (Art. extended during the last illness;
1026) c) The will must have been executed during
or after the spiritual ministration.
Time to Determine Capacity to Succeed • Applies to all religions
General Rule: In order to judge the capacity of the
heir, legatee, or devisee, his qualification at the 2) The relatives of such priest or minister of the
time of the death of the decedent shall be the gospel within the fourth degree, the church,
criterion. (Art. 1034) order, chapter, community, organization, or
institution to which such priest or minister may
Exceptions: belong;
1) Those disqualified under Article 1032
(Unworthiness, pars. 2,3,5) wherein it is 3) A guardian with respect to testamentary
necessary to wait until final judgment is dispositions given by a ward in his favor
rendered; before the final accounts of the guardianship
2) Those disqualified under Article 1032 have been approved, even if the testator
(Unworthiness, par. 4) wherein it is necessary should die after the approval thereof;
to wait for the expiration for the month allowed nevertheless, any provision made by the ward
for report; in favor of the guardian when the latter is his
3) If the institution of the heirs, legacy or devise ascendant, descendant, brother, sister, or
is conditional, the time of compliance with the spouse, shall be valid;
condition shall be considered. (Art. 1034) a) The will must have been executed by the
ward during the effectivity of the
NOTE: guardianship
• The capacity to succeed is governed by the b) The terms of this provision seem to be
law of the nation of the decedent. (Art. 1039) limited to guardians over the property.
• Persons not incapacitated by law may c) A guardian who happens to be an
succeed by will or ab intestato. (Art. 1024) ascendant, descendant, brother, sister, or
• A testamentary provision in favor of a spouse of the ward-testator is excluded
disqualified person, even though made under from the prohibition
the guise of an onerous contract, or made
through an intermediary, shall be void. (Art. 4) Any attesting witness to the execution of a will,
755) the spouse, parents, or children, or any one
claiming under such witness, spouse, parents,
or children;
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• Reiteration of Art. 823 but in more general Apportionment of the disposition or its
terms as it annuls all testamentary proceeds: (Balane, supra)
disposition not only legacies and devises. 1) 1/2 to the church or denomination to which the
The rule that if there are three other testator belonged
competent witnesses as an exception 2) 1/2 to the State, to be applied as provided in
should be read into this. Article 1013.
5) Any physician, surgeon, nurse, health officer Dispositions in Favor of the Poor in General
or druggist who took care of the testator during (Art. 1030)
his last illness; Testamentary provisions in favor of the poor in
• The physician must have taken care of general, without designation of particular persons
the testator during his/her final illness. or of any community, shall be deemed limited to
“Taking care” means medical attendance the poor living in the domicile of the testator at the
with some regularity or continuity. time of his death, unless it should clearly appear
that his intention was otherwise.
6) Individuals, associations and corporations not
permitted by law to inherit under any kind of The designation of the persons who are to be
succession. (Art. 1027) considered as poor and the distribution of the
property shall be made by the person appointed
Prohibitions in donations applies to by the testator for the purpose; in default of such
testamentary succession (Art. 1028 in relation to person, by the executor, and should there be no
Art. 739) executor, by the justice of the peace, the mayor,
Those who are disqualified from receiving and the municipal treasurer, who shall decide by a
donations under Article 739. majority of votes all questions that may arise. In all
Under Article 739, the following are disqualified these cases, the approval of the Court of First
from receiving testamentary dispositions from the Instance shall be necessary.
parties specified:
1) Those made between persons who are guilty The preceding paragraph shall apply when the
of adultery, or concubinage at the time of the testator has disposed of his property in favor of the
donation; poor of a definite locality.
2) Those made between persons found guilty of
the same criminal offense, in consideration Disqualification of a Witness to Succeed to a
thereof; Legacy or Devise (Art. 823)
3) Those made to a public officer or his wife, If a person attests to the execution of a will, to
descendants and ascendants, by reason of whom or to whose spouse, or parent, or child, a
his office; devise or legacy is given by such will, such devise
or legacy shall, so far only as concerns such
Disposition For Prayers and Pious Works for person, or spouse, or parent, or child of such
the Benefit of His Soul person, or any one claiming under such person or
Should the testator dispose of the whole or part of spouse, or parent, or child, be void, unless there
his property for prayers and pious works for the are three other competent witnesses to such will.
benefit of his soul, in general terms and without However, the person attesting shall be admitted as
specifying its application, the executor, with the a witness if such devise or legacy had not been
court's approval, shall deliver one-half thereof or made or given.
its proceeds to the church or denomination to
which the testator may belong, to be used for such Testamentary Provision in Favor of a
prayers and pious works, and the other half to the Disqualified Person is Void (Art. 1031)
State, for the purposes mentioned in Article 1013. A testamentary provision in favor of a disqualified
(Art. 1029) person, even though made under the guise of an
onerous contract, or made through an
Requisites: (Balane, supra) intermediary, shall be void.
1) Disposition for prayers and pious works for the
benefit of the testator’s soul; Unworthiness (Art. 1032)
2) No specification of the application of the The following are incapable of succeeding under
disposition. all kinds of succession by reason of unworthiness:
1. Parents who have abandoned their children or
induced their daughters to lead a corrupt or
immoral life, or attempted against their virtue;
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o Three grounds are provided: 5. Any person convicted of adultery or

(a) abandonment; concubinage with the spouse of the testator;
(b) inducement of a daughter to lead a o Final conviction required
corrupt or immoral life; and
(c) attempt against a daughter’s virtue 6. Any person who by fraud, violence,
o Abandonment - includes all conduct intimidation, or undue influence should cause
constituting a repeated or total refusal or the testator to make a will or to change one
failure to care for the child. already made;
o Inducement - same as deprivation of
parental authority; only applies to female 7. Any person who by the same means prevents
descendants another from making a will, or from revoking
o Attempt on virtue - no conviction is one already made, or who supplants,
required conceals, or alters the latter's will;
2. Any person who has been convicted of an 8. Any person who falsifies or forges a supposed
attempt against the life of the testator, his or will of the decedent.
her spouse, descendants, or ascendants;
o Covers all stages in the commission of the Revocation of Unworthiness
crime The cause of unworthiness shall be without effect
o Felony must be intentional (so not through if the testator had knowledge thereof at the time he
negligence) made the will, or if, having known of them
o Final conviction required subsequently, he should condone them in writing.
(Art. 1033)
3. Any person who has accused the testator of a
crime for which the law prescribes The unworthiness is set aside in the following
imprisonment for six years or more, if the ways: (Balane, supra)
accusation has been found groundless; 1. A written condonation, or
o Covers filing of the complaint before the 2. The execution by the offended party of a will
prosecutor, presenting incriminating with knowledge of the cause of unworthiness.
evidence, suppressing exculpatory
evidence By Operation of Law – In order to restore the
o The testator must be acquitted disinherited heir to capacity, subsequent
o The accusation must be found to be reconciliation is enough under the rules of
groundless—must state that no crime was disinheritance while under those on unworthiness;
committed or that accused did not commit either a written pardon or a subsequent will is
the crime. required. These rules on disinheritance and
unworthiness would overlap the moment the
4. Any heir of full age who, having knowledge of testator uses one of the acts of unworthiness as a
the violent death of the testator, should fail to cause to disinherit an heir. Such act submits the
report it to an officer of the law within a month, situation to the rules on disinheritance; thus,
unless the authorities have already taken reconciliation renders the disinheritance
action; this prohibition shall not apply to cases ineffective. (Balane, supra)
wherein, according to law, there is no
obligation to make an accusation; Pardon of Acts of Unworthiness (Art. 1033)
o There is no such obligation existing under EXPRESS IMPLIED
our present law Made by the Effected when testator
o Requisites: execution of a makes a will instituting
a. the heir has knowledge of violent document or any the unworthy heir with
death of the decedent; writing in which the knowledge of the
b. the heir is of legal age descendent condones cause of incapacity
c. the heir fails to report it to an office of the cause of
the law within a month (after learning incapacity
of it) Cannot be revoked Revoked when the
d. there is a legal obligation for the heir testator revokes the
to make an accusation will or the institution
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Representation in Unworthiness (Balane, NOTE: It may be brought by any one who may
supra) have an interest in the succession. (Art. 1040)
If the person excluded from the inheritance by
reason of the incapacity should be the child or 3. ACCEPTANCE AND
descendant of the decedent, and should have REPUDIATION OF INHERITANCE
children or descendants, the latter shall acquire
his right to the legitime. Characteristics of Acceptance and
Repudiation
The person excluded shall not enjoy the usufruct 1) Free and Voluntary (Art. 1041)
and the administration of the property thus 2) Irrevocable once made and cannot be
inherited by his children. (Art. 1035) impugned, except in cases vitiating consent or
when an unknown will appear; (Art. 1056)
NOTE: The extent of representation may be as to 3) Retroactive (Art. 777)
the legitime and as to the share of the unworthy
heir in the intestate portion. (Balane, supra) Requirements to Accept or Repudiate and
Inheritance
If the unworthy heir is a brother or sister, his A person may only accept or repudiate an
children (nephews and nieces of the decedent) will inheritance once he or she is certain of:
represent. (Balane, supra) 1) The death of the person from whom he is to
inherit; and
Alienations Made by an Excluded Heir 2) His right to the inheritance. (Art. 1043)
Alienations of hereditary property, and acts of
administration performed by the excluded heir, Time for Acceptance or Repudiation
before the judicial order of exclusion, are valid as Within 30 days after the court has issued an order
to third persons who acted in good faith. (Art. for the distribution of the estate the heir, devisee,
1036) or legatee shall signify to the court having
jurisdiction whether they accept or repudiate the
NOTE: The validity of the alienation is determined inheritance. If they do not do so within that time,
by the good faith or bad faith of the transferee, not they are deemed to have accepted the
of the transferor. (Balane, supra) inheritance. (Art. 1057)
The co-heirs of the excluded heir have the right to Who May Accept or Repudiate
recover damages from the disqualified heir. (Art. General Rule: Any person having the free
1036) disposal of his property may accept or repudiate
an inheritance. (Art. 1044)
Right of an Excluded Heir for Indemnity for
Expenses Exceptions:
The unworthy heir who is excluded from the 1) Minors or incapacitated persons
succession has the right to demand indemnity for Acceptance – By their parents or guardians.
any expenses incurred in the preservation of the Repudiation – By their parents or guardians
hereditary property, and to enforce such credits as with judicial authorization (Art. 1044)
he may have against the estate. (Art. 1037) 2) Inheritance left to the poor – The right to
accept the inheritance shall belong to the
Obligations of the Disqualified Heir in persons designated by the testator to
Possession of the Hereditary Property determine the beneficiaries and distribute the
Any person incapable of succession, who, property, or in their default, to those
disregarding the prohibition stated in the mentioned in Article 1030. (Art. 1044)
preceding articles, entered into the possession of 3) Corporation, association, institution, or
the hereditary property, shall be obliged to return entity as beneficiary (Art. 1045)
it together with its accessions. (Art. 1038) Acceptance – May be made by the lawful
representatives
Prescriptive Period Repudiation – May be made by the lawful
The action for a declaration of incapacity and representatives with judicial authority
recovery of the inheritance, devise or legacy shall 4) Literate Deaf-Mutes
be 5 years from the time the disqualified person Acceptance and Repudiation –Personally or
took possession thereof. (Art. 1040) through an agent (Art. 1048)
5) Illiterate Deaf-Mutes (Balane, supra)
Acceptance – Guardians
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Repudiation – Guardians with judicial petition the court to authorize them to accept
approval it in the name of the heir.
• If an heir is both a testate and legal heir,
If the Beneficiary is a Married Woman (Art 1047) repudiation of the inheritance as a testate heir,
She may either accept or repudiate the inheritance he is understood to have repudiated in both
without her husband’s consent. capacities. However, should he repudiate as
a legal heir, without knowledge of being a
Manner of Acceptance of Inheritance (Art. testate heir, he may still accept the inheritance
1049) as a legal heir.
1) Express Acceptance
a. Public Document If renounced in favor of other heirs, does it
b. Private Writing mean acceptance? (Balane, supra)
It depends:
2) Tacit Acceptance – one resulting from acts by 1) If specific heir – whether or not renouncing
which the intention to accept is necessarily heir receives anything, considered as
implied or which one would have no right to do acceptance on the part of the heir. There are
except in the capacity of an heir. It can be two transfers.
presumed from certain acts of the heir such 2) If gratuitous –
as: a. In favor of all his co heirs indiscriminately
a. If the heir sells, donates, or assigns his - there is repudiation because the heir
right to a stranger, or to his co-heirs, or to deemed to have not accepted. Hence,
any of them accretion takes place.
b. If the heir renounces the same, even b. In favor of all co-heirs but in proportion
though gratuitously, for the benefit of one different from those they would receive by
or more of his co-heirs accretion: considered as tacit
c. If he renounces it for a price in favor of all acceptance.
his co-heirs indiscriminately; but if this c. If gratuitous in favor of one or some of his
renunciation should be gratuitous, and co-heirs – deemed conveyance in favor of
the co-heirs in whose favor it is made are the co-heirs specified, hence there is
those upon whom the portion renounced acceptance.
should devolve by virtue of accretion, the 3) If onerously:
inheritance shall not be deemed as a. There is no repudiation
accepted b. Transfer considered to be with
consideration
3) Implied Acceptance - This is acceptance by
inaction. Under Art 1057, to signify There are also tax implications because there are
acceptance or repudiation within 30 days after two transfers.
an order of distribution by the probate court.
COLLATION
Manner of Repudiation (Art. 1051)
The repudiation of the inheritance shall be made The act by virtue of which, the persons who concur
in: in the inheritance bring back to the common
1) A public document signed before a notary hereditary mass the property, which they have
public, or received from him, so that a division may be
2) Authentic instrument – equivalent to an effected according to law and the will of the
indubitable writing or a writing whose testator. (Mison, Wills and Succession Better
authenticity is admitted or proved, or Explained, 2011)
3) By a petition presented to the court having
jurisdiction over the testamentary or intestate To collate is to bring back or to return to the
proceedings. hereditary mass, in fact or by fiction, property
which came from the estate of the decedent,
• The law considers that the act of repudiation during his lifetime, but which the law considers as
is more solemn that the act of acceptance and an advance from the inheritance. (Mison, supra)
that repudiation produces more violent and
disturbing consequences. Concept of Collation
• If the heir repudiates the inheritance to the The act of bringing back to the estate properties
prejudice of his own creditors, the latter may acquired inter vivos and gratuitously from
decedent (if acquired by will, e.g. legacies and
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devisees, they are not collatable, but may be succession opens (if required to return in
reduced for being inofficious) kind)
• Compulsory heirs and strangers must
Obligation of Every Compulsory Heir collate for computation. For strangers,
Every compulsory heir, who succeeds with other there is no effect unless found to be
compulsory heirs, must bring into the mass of the inofficious. If donation to strangers is not
estate any property or right which he may have included, compulsory heirs will be
received from the decedent, during the lifetime of prejudiced because basis for the legitime
the latter, by way of donation, or any other will be smaller. (Balane, supra)
gratuitous title, in order that it may be computed in
the determination of the legitime of each heir, and 2. For equalization on account of partition
in the account of the partition. (Art. 1061) • Only required for compulsory heirs; 2nd
collation; when actually charged either to
However, donations inter vivos to compulsory legitime or free portion.
heirs shall not be imputed to the legitime: • Reason: donation to compulsory heirs are
1) If the donor expressly provided; (Art. 1062) considered advance of legitime,
2) The donee repudiated the inheritance; (Id.) otherwise, it will prejudice other
3) The value of donation exceeds the donee’s compulsory heirs. For strangers, no
legitime equalization is required, are always
charged to free portion. (Paras, supra)
NOTE: The donation will be imputed to the
legitime to the extent of the legitime’s value, Not subject to collation (i.e., charged to free
and the excess to the free portion. (Balane, portion) if:
supra at p. 577) 1. Testator provides otherwise (but still collated
for computation) (Art. 1062)
Properties or Rights Received by Compulsory 2. If compulsory heir repudiates, in which case
Heir not Subject to Collation he is considered a stranger – for computation
1) Property left by will (Art. 1063) only, charged to free portion (Art. 1062)
2) Property which may have been donated by an
ascendant of the compulsory heir (Art. 1065) COLLATION FOR EQUALIZATION
3) Property donated to the spouse of the
compulsory heir (Art. 1066) Requisites (Art. 1069)
4) Expenses for support, education, medical 1. Two or more compulsory heirs. If only one,
attendance even in extraordinary illness, no equalization is needed.
apprenticeship, ordinary equipment or
customary gifts (Art. 1067) 2. Liberality – must be acquired gratuitously
5) Expenses incurred by parents in giving their from the decedent (inter vivos). In donation,
children a professional, vocational, or other gratuitous act may be direct or indirect, as
career (Art. 1068) when parent pays for debt of child or pays for
6) Wedding gifts consisting of jewelry, clothing purchase price of the car placed in name of
and outfit, given by parents or ascendants, so the child – not a demandable debt as when
long as they do not exceed 1/10 of the there is no intention to be reimbursed,
disposable portion (Art. 1070) otherwise placed on asset side as receivables
from the heir (not collation).
Kinds of Collation (Balane, supra) • If there is no liberality, such as arising
1) Collation of Values – values only, no from obligation to support (e.g. education)
physical return –other compulsory heirs cannot ask for
2) Collation in kind – actual return of property collation.
received: only required when inofficious, i.e., • Exception: When liberality is present, but
legitime is impaired no collation is required: Wedding gift of
parent/ascendants consisting of jewelry,
COLLATION OF VALUES clothing, outfit (Art. 1070) not more than
1/10 of the sum disposable by will –
Purposes considered customary gift, not collatable,
1. For computation – Arts. 908, 909 as basis for while excess required to be collated.
determining the legitime
• Determination: value at the time of
donation + fruits & legal interest from date
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3. Identity of heir and donee which may be: 4. PARTITION AND DISTRIBUTION
a. Actual: e.g. F donates to son; Son OF ESTATE
collates for computation and equalization;
If he donates to grandson, son is not PARTITION (Art. 1079, 1082)
required to collate, but grandson collates The separation, division and assignment of a thing
for computation as a stranger. If son held in common among those to whom it may
predeceases, grandson collates for belong. It includes every act which is intended to
computation and equalization (now a put an end to indivision among co-heirs, and
compulsory heir) legatees or devisees, although it should purport to
b. Constructive: F donates to son, son be a sale, exchange, compromise, or any other
predeceases and GS succeeds by transaction. It is not subject to any form.
representation. GS must collate donation
to son even if he does not actually receive Who May Effect Partition
it. 1. Decedent himself during his lifetime by an act
inter vivos or by will (Art. 1080)
If there is no identity: no collation for equalization 2. Heir themselves (Art. 1083)
is required. E.g. Father donates to spouse of son: 3. Competent court (Art. 1083)
Son has no obligation to collate, but spouse must 4. Third person designated by the decedent (Art.
collate for computation as a stranger. If he donates 1081)
to both spouses: ½ each, son collates for
computation and equalization, spouse collates Who Can Demand Partition (Art. 1083)
only for computation. (Paras, supra) 1. Compulsory heir;
2. Voluntary heir;
If collation required for equalization, may be 3. Legatee or devisee;
quantitative: same amount, or qualitative: same 4. Any person who has acquired interest in the
kind. If immovable -equivalent, if not available, sell estate
other properties to generate cash, and if movable,
equivalent properties (Paras, supra) When Partition Cannot be Demanded (PAPU)
1. When expressly Prohibited by the testator
COLLATION IN KIND himself for a period not exceeding 20 years;
(Art. 1083)
Actual return - Only if inofficious, i.e. legitime 2. When the co-heirs Agreed that the estate
impaired. Operates as resolutory condition: shall not be divided for a period not exceeding
donation terminated and must return only to the 10 years, renewable for another 10 years;
extent inofficious: not necessarily a case of total 3. When Prohibited by law;
return. A donee who is required to collate in kind 4. When to partition the estate would render it
is a possessor in good faith, and not required to Unserviceable for the use for which it is
account for fruits and interests except from the intended.
date succession opens. (Art. 1075)
NOTE:
Operations Related to Collation (Paras, supra) • Partition Inter Vivos (Art. 1080) – it is one
1. Collation – adding to the mass of the that merely allocates specific items or pieces
hereditary estate the value of the donation or of property on the basis of the pro indiviso
gratuitous disposition shares fixed by law or given under the will to
2. Imputing or Charging – crediting the heirs or successors.
donation as an advance on the legitime (if the • Partition is not itself a mode of acquiring
donee is a compulsory heir) or on the free ownership, nor a title, but being predicated on
portion (if the donee is a stranger) succession, necessitates relationship to the
3. Reduction – determining to what extent the decedent (in case of intestacy) or a will duly
donation will remain and to what extent it is probated (in case of testacy).
excessive or inofficious
4. Restitution – return or payment of the excess Prohibition to Partition (Art. 1083)
to the mass of hereditary estate. 1. The prohibition to partition for a period not
exceeding 20 years can be imposed on the
legitime.
2. If the prohibition to partition is for more than
20 years, the excess is void.
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3. Even if a prohibition is imposed, the heir’s 2. Between several true heirs and a mistaken
mutual agreement can still make the partition. heir – transmission to mistaken heir is VOID
3. Through error or mistake; share of true heir is
Legal Redemption In Favor Of Co-Heirs (Art. allotted to mistaken heir – partition shall not be
1623) rescinded unless there is bad faith or fraud on
The right of legal redemption predicated upon the the part of the other persons interested, but
fact that the sale made by the co-heir is effected the latter shall be proportionately obliged to
before the partition of the estate but after the death pay the true heir of his share
of the decedent.
NOTE: Partition with respect to the mistaken heir
Requisites: (Aguilar v. Aguilar, G.R. No. 141613) is VOID. (Art. 1105)
1. There must be several co-heirs
2. That one of them sells his right to a stranger A Void Will may be a Valid Partition (Paras,
3. That the sale is made before the partition supra)
4. That the right of redemption must be 1. If the will was in fact a partition; and
exercised by one or more of the co-heirs 2. If the beneficiaries in the void will were legal
within 1 month from the time they were notified heirs
in writing by the co-heir vendor
5. The vendee is reimbursed for the price of the RESCISSION AND NULLITY OF PARTITION
sale.
A partition, judicial or extra-judicial, may also be
EFFECTS OF PARTITION rescinded on account of lesion, when any one of
• Confers upon each heir the exclusive the co-heirs received things whose value is less,
ownership of the property adjudicated. (Art. by at least one-fourth, than the share to which he
1091) is entitled, considering the value of the things at
• After the partition, the co-heirs shall be the time they were adjudicated. (Art. 1098)
reciprocally bound to warrant the title to
(warranty against eviction) and the quality of Partition Made By the Testator (Art. 1099)
(warranty against hidden defects), each
property adjudicated. (Art. 1092) General Rule: A partition made by the testator
• The obligation of warranty shall cease in the cannot be impugned on the grounds of lesion.
following cases: (Art. 1096)
1. When the testator himself has made the Exceptions:
partition unless his intention was 1. When the legitime of the compulsory heirs is
otherwise, but the legitime shall always prejudiced; or
remain unimpaired. 2. When it appears or may reasonably be
2. When it has been expressly stipulated in presumed, that the intention of the testators
the agreement of partition, unless there was otherwise.
has been bad faith.
3. When the eviction was due to a cause Options Available to Obligor-Heir (Art. 1101)
subsequent to the partition, or has been The heir who is sued shall have the option of:
caused by the fault of the distributee of 1. Indemnifying the plaintiff for the loss, by
the property. payment in cash or by delivery of a thing of the
same kind and quality as that awarded to the
As between the deed of extra-judicial partition and plaintiff; or
the subdivision plan which contained an 2. Consenting to a new partition
inadvertent error, the deed of extra-judicial
partition must prevail. The subdivision plan cannot NOTE: If a new partition is made, it shall affect
amend the deed of extra-judicial partition because neither those who have not been prejudiced
that is the binding contract to which all the heirs nor those who have not received more than
agreed. (Ulay v. Bustamante, G.R. Nos. 231721 & their just share. (Art. 1101)
231722, J. Caguioa ponencia)
Remedy of an Heir Who has Alienated the
Effects of Inclusion of Intruder in Partition (Art. Property Adjudicated to Him
1105) An heir who has alienated the whole or a
1. Between a true heir and several mistaken considerable part of the real property adjudicated
heirs – Partition is VOID to him cannot maintain an action for rescission on
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the ground of lesion, but he shall have a right to be NOTE: This is not preterition under Article 854.
indemnified in cash. (Art. 1102) This is simply an omission of a compulsory heir in
the partition, the assumption being that something
Incompleteness of Partition Not a Ground for is left for him in the form of an undisposed portion
Rescission of the estate. The omitted heir simply gets his
The omission of one or more objects or securities rightful share. (Non v. CA, G.R. No. 137287)
of the inheritance shall not cause the rescission of
the partition on the ground of lesion, but the Exception: Bad faith or fraud on the part of the
partition shall be completed by the distribution of other persons interested. (Art. 1104)
the objects or securities which have been omitted.
(Art. 1103) Remedy: The other persons interested shall be
proportionately obliged to pay to the person
Omission of a Compulsory Heir in the Partition omitted the share which belongs to him. (Art.
General Rule: A partition made with preterition of 1104)
any of the compulsory heirs shall not be rescinded.
(Art. 1104)
PERIODS TO REMEMBER ON PARTITION
20 years (Art. 1083) Maximum period testator can prohibit alienation of

dispositions
5 years from delivery to the State (Art. 1014) To claim property escheated to the State
5 years from the time disqualified person took Action for declaration of incapacity & for recovery of
possession (Art. 1040) the inheritance, devise or legacy
30 days from issuance of order of distribution (Art. Must signify acceptance/repudiation otherwise,
1057) deemed accepted
1 month form written notice of sale (Art. 1088) Right to repurchase hereditary rights sold to a stranger
by a co-heir
10 years (Art. 1094) To enforce warranty of title/quality of property

adjudicated to co-heir from the time right of action
accrues
5 years from partition (Art. 1095) To enforce warranty of solvency of debtor of the estate
at the time partition is made
4 years from partition (Art. 1100) Action for rescission of partition on account of lesion
————- end of topic ————
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IV. OBLIGATIONS AND

CONTRACTS A. OBLIGATIONS
1. GENERAL PROVISIONS
TOPIC OUTLINE UNDER THE SYLLABUS
a. Definition
A. OBLIGATIONS
1. General Provisions
An obligation is a juridical necessity to give, to do or
2. Nature and Effect
not to do. (An Act to Ordain and Institute the Civil
3. Kinds
4. Extinguishment Code of the Philippines [CIVIL CODE], Republic Act
B. CONTRACTS No. 386, art. 1156 (1950))
1. General Provisions
2. Essential Requisites b. Elements of an Obligation
3. Reformation of Instruments
4. Interpretation of Contracts Essential Elements an Obligation
5. Rescissible Contracts (Arts. 1156 – 1162) (PAVO)
6. Voidable Contracts 1. Passive Subject (obligor/debtor) – the person
7. Unenforceable Contracts who has the duty of giving, doing or not doing;
8. Void or Inexistent Contracts person bound to the fulfillment
C. NATURAL OBLIGATIONS 2. Active Subject (obligee/creditor) – the person in
D. ESTOPPEL
whose favor the obligation is constituted;
E. TRUSTS
F. QUASI-CONTRACTS person entitled to make a demand
3. Vinculum Juris/ Legal Tie – the efficient cause
or the juridical tie between two subjects by
reason of which the debtor is bound in favor of
the creditor to perform the obligation. It can be
established by various sources of obligations
(law, contract, quasi-contracts, delicts, and
quasi-delicts) and may arise either from
bilateral or unilateral acts of persons.
4. Object/ Subject Matter – the prestation or
conduct which has to be observed by the
debtor/obligor; to be valid, it must be:
(LiPoDeM):
a. Licit
b. Real or Possible
c. Determinate/ Determinable
d. Must be within the commerce of men
(i.e. susceptible of appropriation and
transmissible from one person to
another) (DESIDERIO P. JURADO,
COMMENTS AND JURISPRUDENCE
ON OBLIGATIONS AND
CONTRACTS 457 (2010))
In certain kinds of obligations, the following may

constitute additional requirements:
5. Form – in formal contracts where form is

necessary for validity, e.g., donation
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6. Delivery or Tradition – real contracts where Mutuality

delivery is necessary for perfection of the Neither party may unilaterally evade his obligation in
obligation, e.g., deposit, commodatum, loan the contract, unless the contract authorizes it or the
other party assents. (PINEDA 385 (2009))
(ERNESTO L. PINEDA, OBLIGATIONS AND
CONTRACTS 412 (2009)) Principle of Relativity
Contracts take effect only between the parties, their
c. Sources of Obligations assigns and heirs, except in case where the rights
and obligations arising from the contract are not
Obligations arise from: (L-CQAQ) transmissible by their nature, or by stipulation or by
1. Law; provision of law. The heir is not liable beyond the
2. Contracts; value of the property he received from the decedent.
3. Quasi-contracts;
If a contract should contain some stipulation in favor
4. Acts or omissions punished by law; and of a third person, he may demand its fulfillment
5. Quasi-delicts (CIVIL CODE, art. 1157) provided he communicated his acceptance to the
obligor before its revocation. A mere incidental
NOTE: The list is exclusive. (Sagrado Orden v. benefit or interest of a person is not sufficient. The
Nacoco, G.R. No. L-37756) contracting parties must have clearly and
deliberately conferred a favor upon a third
person. (1257a) (CIVIL CODE, art. 1311)
LAW (OBLIGATION EX LEGE)
The law cannot exist as a source of obligation,
Consensuality of Contracts
unless the acts to which its principles may be
Article 1315. Contracts are perfected by mere
applied exist.
consent, and from that moment the parties are
bound not only to the fulfillment of what has been
Once the acts or facts exist, the obligations arising
expressly stipulated but also to all the
therefrom by virtue of the express provisions of the
consequences which, according to their nature, may
law are entirely independent of the agreement of the
be in keeping with good faith, usage and law. (1258)
parties. (Manila Trading & Supply Co. v. Saez, G.R.
(CIVIL CODE, art. 1315)
No. 4386)
QUASI-CONTRACTS (OBLIGATIONS EX QUASI-
It must be expressly or impliedly set forth and
CONTRACTU)
cannot be presumed. (Martinez v. Martinez, G.R.
Definition
No. 858)
Quasi-contracts are juridical relations resulting from
lawful, voluntary and unilateral acts, which has for
CONTRACTS (OBLIGATIONS EX CONTRACTU) its purpose, the payment of indemnity to the end that
Obligatoriness no one shall be unjustly enriched or benefited at the
Obligations arising from contracts have the force of expense of another. (CIVIL CODE, art. 2142)
law between the contracting parties and should be
complied with in good faith. (CIVIL CODE, art. 1159)
Distinguished from other Sources (LUV)
Autonomy 1. The act giving rise to a quasi-contract must be
Parties may freely enter into any stipulations Lawful distinguishing it from delict;
provided they are not contrary to law, morals, good 2. The act must be Voluntary distinguishing it from
customs, public order or public policy. (CIVIL CODE, a quasi-delict which is based on fault or
art. 1306) negligence; and
3. The act must be Unilateral distinguishing it from
Literal meaning contract which is based on agreement.
The terms of the contracts determine the respective (PINEDA 15 (2009))
obligations of the parties. If the terms of the contract
are clear and leave no doubt upon the contracting DELICTS (OBLIGATION EX MALEFICIO OR EX
parties’ intention, such terms should be applied in DELICTO)
their literal meaning. (CIVIL CODE, art. 1370) Every person criminally liable for a felony is also
civilly liable. (An Act Revising the Penal Code and
Other Penal Laws [REVISED PENAL CODE], Act
No. 3815, art. 100 (1932))
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Such civil liability is a necessary consequence of Elements: (ADD)

criminal responsibility, and is to be declared and 1. That there exists a wrongful Act or omission
generally enforced in the criminal proceeding imputable to the defendant by reason of his fault
EXCEPT where: or negligence;
a. the injured party reserves his right to avail 2. That there exists a Damage or injury, which
himself of it in a distinct civil action or must be proved by the person claiming
b. in cases where an independent civil action is recovery;
allowed by law. (CIVIL CODE, art. 33; 2000 3. That there must be a Direct causal connection
REVISED RULES OF CRIMINAL or a relation of cause and effect between the
PROCEDURE, rule 110, § 1) fault or negligence and the damage or injury; or
that the fault or negligence be the cause of the
Scope of civil liability damage or injury. (CIVIL CODE, art. 2176;
1. Restitution Taylor v. Manila Electric Co., G.R. No. L4977)
2. Reparation for damage caused
3. Indemnity for consequential damages Negligence: Failure to observe for the protection of
(REVISED PENAL CODE, art. 104) the interests of another person, that degree of care,
precaution and vigilance, which the
Effect of acquittal in criminal case circumstances justly demand, whereby such
General Rule: The acquittal of the accused in the other person suffers injury. (US v. Barias, G.R. No.
criminal case due to the prosecution’s failure to L-7567)
prove guilt beyond reasonable doubt does not
prejudice the civil action, in which the offended party Test of Negligence: “Would a prudent man, in the
may still be able to recover damages by a mere position of the person to whom negligence is
attributed, foresee harm to the person injured as a
preponderance of evidence. (CIVIL CODE, art. 29)
reasonable consequence of the course about to be
pursued?” (Picart v. Smith, G.R. No. L-12219)
Exception: Where the judgment of acquittal
contained a declaration that no negligence can be Quasi-delict as a cause of action despite a pre-
attributed to the accused and that the fact from existing contractual relation
which the civil action might arise did not exist.  General Rule: Actions based on breach of
(Castillo v. CA, G.R. No. 48541, Aug. 21, 1989) contract and actions based on quasi-delicts
differ in terms of conditions, defenses, and
proof. They cannot co-exist. (Orient Freight v.
Extinguishment of liability Keihin, G.R. No. 191937)
The civil liability for crimes is extinguished by the
 Exceptions:
same causes provided by the Civil Code for the
a. When such a contractual relation exists, the
extinguishment of other obligations. (RULES OF
obligor may break the contract that the
CIVIL PROCEDURE, rule 4, § 4)
same act which constitutes a breach of the
contract would have constituted the source
NOTE: Death of the accused during the pendency of an extra-contractual obligation, had no
of the case can extinguish the civil liability if the contract existed between the parties
same arose directly from the crime committed. (Cangco v. Manila Railroad Co., G.R. No.
However, this does not apply if civil liability can be L-12191);
based on another source of obligation (i.e., law on
human relations). (Asilo, Jr. v. People, G.R. Nos. b. The act that breaks the contract may also
159017-18 & 159059) be a tort (Air France v. Carrascoso, G.R.
No. L-21438).
QUASI-DELICTS/TORTS (OBLIGATION EX
QUASI-DELICTO OR EX QUASI MALEFICIO) NOTE: When the obligation is based on a
It is an act or omission arising from fault or contract, without which the obligation does
negligence, which causes damage to another, there not exist, the cause of action must be
being no pre-existing contractual relations between founded on the breach of contract and
the parties. (CIVIL CODE, art. 2176) cannot be based on quasi-delict (PSBA v.
Court of Appeals, G.R. No. 84698). In Air
France, what was punished was the
company’s racist policy which emboldened
the manager to expel the Filipino from first
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class because a white man had a better other circumstances. (CIVIL CODE,
right to the seat. art. 1246)
b. To pay damages in case of breach of
Air France would apply if the act which the obligation. (CIVIL CODE, art. 1170)
breaches a contract was done in bad faith
and amounts to a violation of Article 21 of b. Obligation to Do or not to Do
the Civil Code.
Rights of a Creditor in an Obligation To Do or
Not To Do
2. NATURE AND EFFECT 1. To do (Positive Personal)
a. The obligee is entitled to have the thing
a. Obligation to Give done in a proper manner, by himself or
by a third person, at the expense of the
Duties of a Debtor in an Obligation To Give obligor;
1. To give a determinate thing (CIVIL CODE, arts. b. To demand what has been poorly done
1163, 1164 & 1166) be undone;
a. To deliver the thing itself; (CIVIL c. To recover damages because of
CODE, art. 1163) breach of the obligation. (CIVIL CODE,
b. To preserve or take care of the thing art. 1167)
due with the diligence of a good father
of a family (i.e., that standard of care 2. Not to do (Negative Personal)
which an owner would give to his own a. To have the thing undone at the
property), unless the law requires or expense of the obligor; and/or
the parties agree otherwise; (CIVIL b. To ask for damages. (CIVIL CODE, art.
CODE, art. 1163) 1168)
The law or contractual stipulation may PERSONAL RIGHT REAL RIGHT

require a different degree of diligence: Jus ad rem, a right Jus in re, a right
greater or extraordinary diligence enforceable only enforceable against
(diligentia exactissima), or less or slight against a definite the whole world
diligence (diligentia levissima). person or group of
(RUBEN F. BALANE, JOTTINGS AND persons
JURISPRUDENCE IN CIVIL LAW Right pertaining to a Right pertaining to a
(OBLIGATIONS AND CONTRACTS) person to demand from person over a
63 (2020)) another, as a definite specific thing, without a
passive subject, the definite passive
c. To deliver fruits, whether civil, fulfillment of the subject against whom
industrial, or natural fruits (obligor is prestation to give, to do the right may be
liable for fruits only from the time the or not to do. personally enforced
obligation to deliver arises); and (PINEDA 15 (2009))
d. To deliver accessions and accessories
(CIVIL CODE, art. 1166) NOTE: The creditor has a right to the fruits of the
Accessions – incorporated or thing from the time the obligation to deliver it
attached to the object to form part
arises. However, he shall acquire no real right
of the principal.
over it until the same has been delivered to him.
(1095) (CIVIL CODE, art. 1164)
Accessories – added for
completion, use perfection or NOTE: Nature of creditor’s right to fruits before
embellishment. delivery
In accordance with the second sentence of the
2. To give a generic thing (CIVIL CODE, arts. 1246
article, before the fruits are delivered to him, the
& 1170)
creditor’s right to the fruits (in cases where he is
a. To deliver the thing of the quality
intended by the parties, taking into
entitled to him) is purely personal (i.e. exclusively
consideration the purpose of the against the debtor, his successors, or assigns).
obligation, intent of the parties, and Rule: No real right of ownership or possession
enforceable against the whole world arises in his
favor until delivery. It is not by agreement alone,
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but by delivery that ownership is transferred. e. Breaches of Obligations

(BALANE 66 (2020)
Causes of Breach
c. Transmissibility of Obligations 1. Incidental Fraud (Dolo incidente)
2. Negligence (Culpa)
General Rule: All rights acquired in virtue of an 3. Default / Delay (Mora)
obligation are generally transmissible (CIVIL CODE, 4. Contravention of Terms (CIVIL CODE, art.
art. 1178) 1170)
Exception: Rights acquired in virtue of an There is breach when the obligor fails without legal
obligation are NOT transmissible when: excuse (such as fortuitous events) to perform any
1. Prohibited by law – Examples: promise, which forms the whole or part of an
a. Contract of partnership (CIVIL obligation. (Guanio v. Makati ShangriLa and Resort,
CODE, art. 1767) Inc., G.R. No. 190601; R.S. Tomas Inc. v. Rizal
b. Contract of agency (CIVIL CODE, Cement Co. Inc., G.R. No.173155)
art. 1868)
c. Contract of commodatum (CIVIL Breach
SCOPE OF BASIS OF
CODE, art. 1933) Arising
2. Prohibited by stipulation of the parties, as long
LIABILITY LIABILITY
From:
as it is not contrary to public policy. Liable for all Actual
3. The obligation is purely personal in nature — consequences knowledge or
when the obligor’s personal qualifications and of act, whether awareness of
skill was the motive behind the contract. foreseen or the cause
unforeseen
d. Performance of Obligations DOLO
(e.g., loss of (CIVIL CODE,
profits) art. 2201;
The obligation arises: Legaspi Oil Co.,
1. Pure obligation: Upon demand (CIVIL CODE, (CIVIL CODE, Inc. v. CA, G.R.
art. 1179) art. 2201) No. 96595)
Liable only for Possibility of
2. Obligations with Suspensive those foreseen, knowledge or
or could have awareness
Condition/Period
foreseen (ought or could
General Rule: Only from the time the CULPA
have foreseen)
condition/period is fulfilled, but the obligation (CIVIL CODE,
retroacts to the day of its constitution. (CIVIL CODE,
art. 2201) (CIVIL CODE,
art. 1187)
art. 2201)
No liability – Absence of
Exception: Regarding fruits and interests in
unforeseen or possibility of
reciprocal obligations (even if the two reciprocal
obligations are not of the same value), the parties
even if knowledge
are deemed as mutually compensated during the foreseen, is (could not be
FORTUI
pendency of the condition. unavoidable foreseen or if
TOUS
foreseen, could
EVENT
Thus, there is no liability to account for fruits and (CIVIL CODE, not be avoided)
interests in reciprocal obligations. For unilateral art. 1174)
obligations, the debtor shall appropriate the fruits (CIVIL CODE,
and interests received, unless it was intended art. 1174)
otherwise.
INCIDENTAL FRAUD (DOLO INCIDENTE)
3. Obligations subject to a Resolutory Fraud is the deliberate or intentional evasion of the
Condition/Period: No obligation to deliver normal fulfillment of an obligation. (8 Manresa, 5th
fruits since performance or delivery is Ed., Book, 1, 72)
immediate, subject to its resolution upon the
happening of the condition/period. (CIVIL
CODE, art. 1187)
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Types of Fraud
INCIDENTAL CAUSAL NEGLIGENCE CRIME
(Dolo incidente; (Dolo Causante; Any act with fault or Acts punishable by law
ART. 1170) ART. 1338) negligence (CIVIL (REVISED PENAL
Present during the Present before or CODE, art. 1173) CODE, art. 3)
performance of a simultaneously with the Criminal intent Criminal intent
preexisting obligation perfection of a contract unnecessary necessary
Purpose is to evade Purpose is to secure Damages may be Some crimes do NOT
the normal fulfillment of the consent of another awarded to injured give rise to civil liability
the obligation to enter into the party
contract Violation of private Violation of public and
Results in the breach Results in vitiation of rights private rights
of an obligation consent; voidable Preponderance of Proof beyond
contract evidence reasonable doubt
Gives rise to a right in Gives rise to a right of Can be compromised Criminal liability cannot
favor of the obligee to an innocent party to as any other civil be compromised
sue for specific annul the (voidable) liability
performance or contract Presumption of Presumption of
rescission, with negligence innocence
damages in either (DE LEON 27 (2014))
case.
(JURADO 63 (2010)) NOTE: On the Presumption of negligence
This article creates a rebuttable presumption of
NOTE: Future fraud CANNOT be waived. However, culpability when the thing to be delivered is lost
the law does NOT prohibit renunciation of the action while in the debtor’s possession. This article is
for damages on the ground of past fraud. (CIVIL quite consistent with the duty imposed in Art.
CODE, art. 1171)
1163 to take care of the thing with the diligence of
a good father of the family. The intervention of a
NEGLIGENCE (CULPA)
fortuitous event as a causative factor of the loss
Any voluntary act or omission, there being no malice
which prevents the normal fulfillment of an
is something for the debtor to prove.
obligation. (HECTOR S. DE LEON & HECTOR M.
DE LEON, JR., COMMENTS AND CASES ON Generally, the debtor can overcome the
OBLIGATIONS AND CONTRACTS 58 (2014)) presumption of fault by proving fortuitous event.
o Exceptionally, the debtor’s liability is not
Consists in the omission of that diligence which is taken away in case of a fortuitous event
required by the nature of the obligation and if he has incurred in delay or promised
corresponds with the circumstances of the persons, the same thing to two or more persons.
of the time and of the place (CIVIL CODE, art. 1173) In these cases, he becomes an insurer of
the thing. (BALANE 402 (2020))
FRAUD NEGLIGENCE
There is deliberate There is no deliberate Kinds of Negligence
intention to cause intention to cause 1. Quasi-Delict (Culpa aquiliana/culpa extra
damage damage contractual) – source of obligation; wrong or
Liability cannot be Liability may be negligence committed independent of contract
mitigated mitigated (CIVIL and without criminal intent
CODE, art. 1173)
Must be clearly proved Presumed from the 2. Contractual Negligence (Culpa
breach of a contractual Contractual) – wrong or negligence in the
obligation performance of an obligation or contract
Waiver for future fraud Waiver for future
is void (CIVIL CODE, negligence may be 3. Criminal Negligence (Culpa Criminal) –
art. 1171) allowed in certain wrong or negligence in the commission of a
cases crime (DE LEON 65-66 (2014))
(DE LEON 62 (2014))
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that of a reasonable person who is blind. (Francisco

CULPA AQUILIANA CULPA v. Chemical Bulk Carriers, Incorporated, G.R. No.
CONTRACTUAL 193577)
Negligence is Negligence merely an
substantive and incident of Instances where the law requires a higher
independent performance of an standard of care
obligation • Banks – as a business affected with public
Generally, there is no There is a preexisting interest, and because of the nature of its
preexisting contractual contractual relation functions, banks are under obligation to treat
obligation the accounts of its depositors with meticulous
Source of the
Source of the care, always having in mind the fiduciary nature
obligation is the
obligation is the breach of their relationship. (Simex v. CA, G.R. No.
negligence itself (CIVIL
of the contractual 88013)
CODE, art. 2176) obligation (CIVIL
CODE, arts. 1170- Exception: Extraordinary diligence does not
1174; 2201) cover transactions outside bank deposits, i.e.
Negligence must be Proof of existence of commercial transactions. (Reyes v. CA, G.R.
proved the contract and its No. 94214)
breach is prima facie
sufficient to warrant • Realty Corporations – A corporation
recovery engaged in the buying and selling of real estate
For the negligence of For the negligence of is expected to exercise a higher standard of
an employee, diligence an employee, diligence care and diligence in ascertaining the status
in the selection and in the selection and and condition of the property subject of its
supervision of the supervision of the business transaction. Similar to investment and
employees is a employees is NOT financing corporations, it cannot simply rely on
defense of the available as a defense an examination of a Torrens certificate to
employer of the employer determine what the subject property looks like,
(EDGARDO L. PARAS, CIVIL CODE OF THE as its condition is not apparent in the document.
PHILIPPINES ANNOTATED: PRESCRIPTION; (Eagle Realty Corp. v. Republic, G.R. No.
OBLIGATIONS AND CONTRACTS 144-145 151424)
(2016))
• Common Carriers – from the nature of their
Rule on Standard of Care business and for reasons of public policy,
1. That which the law requires; or common carriers are bound to observe
2. That stipulated by the parties; or extraordinary diligence in the vigilance over the
3. In the absence of the above, diligence of a goods and for the safety of the passengers
good father of a family (CIVIL CODE, art. 1163) transported by them, according to all the
circumstances of each case. (CIVIL CODE, art.
However, parties cannot stipulate that there 1733)
would be absolute exemption from liability for
any fault or negligence, since it is against public Effects of contributory negligence of the
policy. (Heacock vs. Macondray, G.R. No. L- obligee
16598; CIVIL CODE, arts. 1306, 1744, 1745) • General rule: Reduces or mitigates the
damages which he can recover.
Diligence of a good father of a family – ordinary • Exception: If the negligent act or omission of
care or that diligence which an average or the creditor is the proximate cause of the event,
reasonably prudent person would exercise over his which led to the damage or injury complained
own property (DE LEON 34 (2014)) of, he cannot recover. (CIVIL CODE, art. 2179)
Standard of care of disabled person DEFAULT OR DELAY (MORA)

A disabled person is required to use the same General rule: Those obliged to deliver or to do
degree of care that a reasonably careful person something incur in delay from the time the obligee
having the same disability would use. Physical judicially or extrajudicially demands from them the
handicaps are treated as part of the circumstances fulfillment of their obligation. (CIVIL CODE, art.
under which a reasonable person must act. Thus, 1169)
the standard of conduct for a blind person becomes
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Exception: Demand by the creditor NOT necessary Demand is also unnecessary where it is
when: (LTU) apparent that it would be unavailing, as
1. Law or obligation expressly declares so; where there has been a prior absolute refusal
by S (see 13 C.J. 661.) or S has manifested
Examples: an intention not to comply with his obligation.
(DE LEON 48-49 (2019))
When the obligation so provides:
D promised to pay C the sum of P20,000.00
Requisites to be in delay: (CIVIL CODE, art.
on or before November 30 without the need
1169)
of any demand. Therefore, if D fails to pay
1. Obligation is Demandable
on November 30, he is automatically in
default. In this case, the parties stipulate to 2. Debtor Delays performance
dispense with the demand. (DE LEON 46 3. Creditor Demands performance judicially or
(2019)) extrajudicially
When the law so provides: NOTE: In reciprocal obligations, a party does not
Under the law, taxes should be paid on incur in delay if the other party is not ready or willing
or before a specific date; otherwise, to assume and perform the obligation imposed upon
penalties and surcharges are imposed him/her (CIVIL CODE, art. 1169)
without the need of demand for payment
by the government. NOTE: In reciprocal obligations, if the period for the
fulfillment of the obligation is fixed, demand by the
The partner is liable for the fruits of the obligee is still necessary before the obligor can be
thing he may have promised to contribute considered in default and before a cause of action
for rescission will accrue. (Solar Harvest v. Davao
to the partnership from the time they
Corrugated Carton Corporation, G.R. No. 176868,
should have been delivered without the
Jul. 26, 2010)
need of any demand. (DE LEON 47
(2019)) NOTE: The power to rescind is implied in reciprocal
obligations. In Lam v. Kodak (2016), although there
2. Time is of the essence was no stipulation, the court ruled that since both
parties exercised their right to resolve under Art.
Examples: 1191, judicial rescission is not necessary because
• The delivery of balloons on a particular date the power to resolve is implied in reciprocal
when a children’s party will be held; obligations. (Lam v. Kodak, G.R. No. 167615; see
• The making of a wedding dress where the discussion on Nissan Car Lease v. Lica
wedding is scheduled at a certain time; Management, Jan. 13, 2016 under “Void or
• Payment of money at a particular time so Inexistent Contracts”)
that the creditor could pay off certain debts
due on the same date; The use of a credit card to pay for a purchase is only
• The delivery of a car to be used in a trip at an offer to the credit card company to enter a loan
a particular time; etc. (DE LEON 47 (2019)) agreement with the credit card holder. Before the
credit card issuer accepts this offer, no obligation
3. Demand would be Useless (CIVIL CODE, art. relating to the loan agreement exists between them.
1169) A demand presupposes the existence of an
obligation between the parties. (Pantaleon v.
Examples: American Express International, Inc., G.R. No.
S obliged himself to deliver a specific horse to 174269)
B on December 5. Through S’s negligence or
deliberate act, or by reason of a fortuitous event If the contract stipulates that “the project is
for which S has expressly bound himself estimated to be completed in 6 years,” failure to
responsible (see Art. 1174.), the horse died on finish the project in 6 years does not put the obligor
December 2. in delay. Mere estimate cannot be considered a
period or a day certain. (Salonte v. COA, et al., G.R.
Under this situation, any demand for the No. 207348)
delivery of the horse on December 5 would
be useless as S has made it impossible for NOTE:
him to perform his obligation. • A reminder is not equivalent to a demand.
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• Premature demand does not give rise to insured (D), undertakes to indemnify the latter
default. for the loss of the thing insured by reason of the
• If there is no fixed due date, or when the peril insured against even if the cause of the
debtor promises to pay when his means loss is a fortuitous event. Here, risk of loss or
permit him to do so, there can be no default damage is an essential element in the
obligation. (DE LEON 78-79 (2019))
unless a deadline is fixed by the parties or the
court.
4. If the loss of the thing occurs after the obligor
incurred in Delay; and
Kinds of delay
5. If the obligor promised to deliver the same thing
1. Mora solvendi – delay or default committed by
to Two or more persons who do not have the
obligor
same interest (CIVIL CODE, art. 1165)
2. Mora accipiendi – delay or default committed
6. If the thing to be delivered is Generic
by oblige
3. Compensatio Morae – default of both obligor
Declaration of martial law, per se, is not a fortuitous
and obligee (JURADO 457 (2010))
event. While a lot of businesses suffered financial
reverses during this period, it could not be used as
CONTRAVENTION OF THE TENOR OF THE
a defense when sued for collection of debts validly
OBLIGATION
incurred. (Philippine Free Press v. CA, G.R. No.
This refers to failure to comply with the terms of the
132864)
obligation, and will require dolo, culpa or delay as
the cause of the failure to comply, in order to
The Asian Debt Crisis in 1997 is not a fortuitous
constitute a breach. (CIVIL CODE, art. 1170;
event. A real estate company engaged in preselling
JURADO , 74 (2010))
of condominium units should have been able to
assess foreign exchange risks. The fluctuating
Defense against breach: FORTUITOUS EVENTS movement of the Philippine Peso in the FX market
is a daily occurrence, so Megaworld cannot claim
Requisites of Fortuitous Events (NIIU) fortuitous events as an excuse for non-delivery of
1. Event must be Independent of obligor’s will; units. (Megaworld Globus Asia Inc. v. Tanseco, G.R.
2. Event is Unforeseeable or unavoidable No. 181206)
3. Such event renders it Impossible for the debtor
to perform (not only makes it difficult, but The Christmas season cannot be cited as an act of
impossible) God that would excuse a delay in the processing of
4. No contributory negligence (Lasam v. Smith, claims by a government entity that is subject to
G.R. No. L-19495) routine accounting and auditing rules. (MIAA v. ALA
Industries Corp, G.R. No. 147349)
General rule: Loss due to fortuitous events shall
The sudden act of a passenger who stabbed
extinguish the obligation (CIVIL CODE, art. 1174)
another passenger in the bus is within the context of
force majeure. But before common carrier may be
Exceptions: (SALTD-G)
absolved, it is not enough that the accident was
1. If by Law the obligor is liable even for fortuitous
caused by force majeure. The common carrier must
event
still prove that it was not negligent in causing
2. If by Stipulation the obligor is liable even for injuries. (Bachelor Express, Inc. v. CA, G.R. No.
fortuitous event 85691)
3. If the nature of the obligation requires the
Assumption of the risk (CIVIL CODE, art. 1174) If obligation is to deliver materials for a fixed period
such as 30 years, fortuitous events occurring within
Example: the period, such as the outbreak of war which took
D insured his house against fire for 6 years out of the 30-year period and destroyed
P500,000.00 with R, an insurance company. plants, machinery and equipment and prevented the
Later, the house was destroyed by accidental obligor from making deliveries, the occurrence of
fire. such a fortuitous event will not extend the period of
the contract beyond its fixed period. This is because
Although the cause of the loss is a fortuitous the obligor was excused from performance during
event, D may recover the amount of the policy. the period when the fortuitous events prevented it
In a contract of insurance, the insurer (R), in from performing its obligations. (Victorias Planters
consideration of the premium paid by the Association v. Victorias Milling, G.R. No. 6648)
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and after this additional time, if obligor still does

A person obliged to perform an obligation is NOT not perform, courts will allow resolution or
excused from a fortuitous event when the nature of cancellation. (CIVIL CODE, art. 1191;
the obligation requires the assumption of risk. In Kapisanan Banahaw v. Dejarme, G.R. No.
other words, it is NOT enough that the event should L32908, Nov. 28, 1930) The principle is that
not be foreseen or anticipated, but it must be one resolution will not be permitted for a slight or
that is impossible to foresee or to avoid. (Republic casual breach of a contract, but only for such
v. Luzon Stevedoring, G.R. No. L21749) breaches as are so substantial and
fundamental as to defeat the object of the
f. Remedies Available to Creditor in parties in entering into the agreement.
Cases of Breach (Multinational v. Ara Security, 441 SCRA 126
(2004))
1. Specific Performance – requiring delivery or
performance of the obligation. Remedy Specific only to Obligations Not to
Do: to compel that the act in violation of the
Can be combined with damages, but obligation to be undone if possible and if not, only
inconsistent with the remedy of resolution or damages may be pursued. (CIVIL CODE, art. 1168)
cancellation. (Magdalena Estate, Inc. v. Myrick,
G.R. No. L-47774) 3. KINDS OF OBLIGATIONS
Can be pursued successively (but not a. Pure Obligations

simultaneously) with resolution or cancellation;
if initial action is for specific performance and Definition – It is an unqualified obligation, which is
obligor does not or cannot deliver, courts have demandable immediately. Its performance does
allowed obligee to pursue resolution or NOT depend upon a future and uncertain event, or
cancellation. (CIVIL CODE, art. 1191) past event unknown to the parties. (CIVIL CODE,
art. 1179)
This is NOT a remedy in an obligation “Not to
do” that has been breached since the prohibited b. Conditional Obligations
act has been done. (DE LEON 44 (2014))
Definition – The performance in conditional
2. Damages – can be combined with any remedy obligations depends upon a (1) future AND
or pursued independently – also available in uncertain event, (2) or upon a past event unknown
breach of any prestation. (CIVIL CODE, art. to the parties. (DE LEON 106 (2014))
1191)
NOTE: For the first kind, Article 1179 uses the
3. Substitute performance – ask others to phrase “future ‘or’ uncertain” -- it must be construed
perform and charge the cost to the obligor as “and”. (4 TOLENTINO 144 (1991))
(CIVIL CODE, arts. 1165-1168)
Conditional Obligations may be further
Not available in:
classified into:
a) Obligation to give specific things (already
1. Suspensive or resolutory
set apart from class or genus to which it
2. Potestative (based on the will of one of the
belongs); (CIVIL CODE, art. 1165)
parties), Casual (based upon chance or will of
b) Obligations not to do; (CIVIL CODE, art.
3rd parties), and Mixed (combination of will of
1168) and
one of the parties + chance and/or will of 3rd
c) Obligations to do which are purely personal
persons)
in character. (4 ARTURO M. TOLENTINO,
3. Possible or impossible
COMMENTARIES AND
4. Positive or negative
JURISPRUDENCE ON THE CIVIL CODE
5. Divisible or indivisible
OF THE PHILIPPINES 99-100 (1991))
6. Conjunctive or alternative
7. Express or implied
4. Resolution/Cancellation – implied in
(JURADO 110 (2010))
reciprocal obligations, but not available if the
breach is slight, unless time is of the essence.
(Biando v. Embestro, G.R. No. L11919) If NOTE: All combinations are valid, EXCEPT only
breach is only slight, generally courts will grant those conditional obligations which are suspensive
additional time for the obligor to pay or perform and dependent solely on the will of the debtor.
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(DE LEON 106-107 & 111-112 (2014))

Examples:
I’ll give you P1,000,000 next month if I decide to Rule on fruits in suspensive condition:
run for the upcoming national elections. a) In suspensive conditions, the effect of a
conditional obligation “to give” retroacts to the
Trillana v. Quezon Colleges, Inc. day of the constitution of the obligation.
93 Phil. 383 b) Nevertheless, when the obligation imposes
reciprocal prestations, the fruits and interests
FACTS: D purchased 200 shares of stock of the during the pendency of the suspensive
Quezon Colleges, subject to the condition that condition shall be deemed to have been
she would pay for the same as soon as she would mutually compensated.
be able to harvest fish from her fishpond. c) If the obligation is unilateral, the debtor or
Issue: Is this condition valid? obligor shall appropriate the fruits and interests
received, unless from the nature and
HELD: No, because this suspensive condition is circumstances of the obligation it should be
purely potestative on her part. (Civil Code of the inferred that the intention of the person
constituting the same is different. (CIVIL CODE,
Philippines Annotated by Edgardo L. Paras 198-
art. 1187)
199 (2008))
THUS: suspensive condition + purely potestative on NOTE: Doctrine of constructive fulfillment –

debtor = both condition and obligation void. Hence, Condition shall be deemed fulfilled when the obligor
there is no obligation. voluntarily prevents fulfillment. (CIVIL CODE, art.
1186)
A provision in a Conditional Deed of Sale stating that • REQUISITES:
the vendee shall pay the balance of the purchase a) Condition is suspensive
price when he has successfully negotiated and b) Obligor prevents fulfillment of condition
secured a right of way is not a purely potestative c) Obligor acts voluntarily
condition on the perfection of the contract nor on the
validity of the entire contract or its compliance as RESOLUTORY CONDITION
contemplated by Art. 1308. Such a condition is • Demandable at once
likewise dependent on chance as there is no • Once the condition is established or
guarantee that the vendee and the third-party acknowledged, the right to demand
landowners would come to an agreement regarding performance immediately exists and
the road right of way, a type of mixed condition therefore the obligation can be demanded
expressly allowed under Art. 1182. Where the so- at once.
called potestative condition is imposed not on the • It is also known as “condition subsequent”
birth of the obligation but on its fulfillment, only the • The happening of the condition has the
condition is avoided, leaving unaffected the effect of extinguishing an obligation. (DE
obligation itself. (Catungal v. Rodriguez, GR No. LEON 109 & 111-112 (2014))
146839)
NOTE: In case of reciprocal obligations, the
SUSPENSIVE CONDITION obligation of one is a resolutory condition of the
obligation of the other, the non-fulfillment of which
• The happening of the condition creates the entitles the other party to resolve or cancel the
obligation. contract. (DE LEON 53 (2014))
• Not demandable at once.
• Gives rise to the existence of an obligation. For POTESTATIVE CONDITION
example, in a Contract to Sell, the fulfillment of The fulfillment of the condition entirely depends
the suspensive condition, which is the full upon the sole will of a party – may be purely
payment of the purchase price, gives rise to the potestative on the part of the obligee (valid), or the
obligation of the seller to convey the title to the obligor/ debtor (void if suspensive). (PARAS 201
prospective buyer. If the condition was not (2016))
fulfilled, it only prevents the obligation of the
seller to convey title to arise. (DE LEON 102
(2014))
• Also known as “condition precedent”
• Gives birth to obligations
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Simple potestative v. Purely potestative (becomes a pure

suspensive condition obligation). (DE
SIMPLE PURELY LEON 135 (2014))
POTESTATIVE POTESTATIVE
Presupposes not only Depends solely and
a manifestation of will exclusively upon the Condition coupled with a Term
but also the realization will (e.g., “if I like it” or The condition that some event will not happen at a
of an external act (e.g., “If I deem it proper). determinate time, shall render the obligation
“if you sell your effective from the moment (1) the time indicated has
house”). Destroys the efficacy of elapsed, or (2) if it has become evident that the
the legal tie. If a person event cannot occur. (CIVIL CODE, art. 1185)
The simple potestative says, “I will sell my
condition on the part of house if I deem it Otherwise, generally, a party must wait for the
the debtor does not proper,” there is no condition to be fulfilled, until it becomes certain that
prevent the formation seriousness in this condition (1) cannot be fulfilled (parties are
of a valid obligation. undertaking. (4 released), or (2) may be deemed fulfilled at such
While to a certain TOLENTINO 151 time as the parties contemplated, bearing in mind
extent, it depends on (1991)) the nature of the obligation. (CIVIL CODE, art. 1185)
the voluntary act of the
obligor, it is still POSITIVE NEGATIVE
subject, in part, to SUSPENSIVE SUSPENSIVE
contingencies over
Condition must Condition
which he has no
be fulfilled should NOT
control. For instance, “I Rule
before happen before
agree to make the first
stipulated term stipulated term
offer to you should I
decide to sell my
Effect if
The parties are
house.” The condition Condition
Obligation released as of
depends upon the will is fulfilled
arises from the date of the
of the offeror, but in before fulfillment happening of
consequence of arrival of the condition
external circumstances the term
which may arise (e.g., Parties are
the need for money or released as of
the advantage of arrival of the
transferring to a Effect if term
different location). (4 Condition
The obligation
TOLENTINO 151 is not But Parties
arises from the
(1991)) fulfilled may be
time the term
before the released even
arrives.
arrival of before arrival if
Effect of illegal, immoral or impossible
the term it becomes
condition
indubitable that
TO GIVE / TO DO NOT TO GIVE / NOT the condition
SOMETHING TO DO SOMETHING will not happen
Both condition and Condition considered
obligation are void, not written, hence, the
hence, there is no obligation is valid – c. Obligations with a Period or a Term
obligation. the condition is merely
superfluous.
(PINEDA92 (2009)) Obligations which are demandable on a “day
Exception: In
certain”.
gratuitous obligations,
iIIegal conditions are
“Day certain” refers to either:
considered as not
written, hence
a) A future AND certain event; or
b) Payable when able, or when debtor
condition is deemed
not written and the promises to pay when “his means permit
obligation is valid him to do so” – period is to be fixed by the
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court, taking into account intention of the object since there is no right or obligation yet at
parties (PINEDA 129 (2009)) this time.
• Obligor: No obligation to deliver or perform yet
May also be further classified into: at this time.
(a) Suspensive - obligation is suspended until
arrival of the period; or NOTE: In an obligation to give specific things,
these are the effect of loss, impairment or
(b) Resolutory - obligation is immediate but improvement of the specific thing which is the object
terminates upon arrival of the period. (DE of the obligation:
LEON 194 (2014)) CAUSE LOSS IMPAIR IMPROVE
MENT MENT
Suspensive or resolutory condition v. term Obligor’s Obligor Obligee Obligor has
CONDITION TERM Fault to pay may usufructuar
Suspensive It may or may It is certain damage choose y rights only
not happen, that it will s resolutio – i.e., can
hence happen; just n or use it but is
uncertain uncertain as fulfillmen not entitled
whether there to when it will t, with to payment,
is an happen. damage and can
obligation. s remove it
Resolutory It is not certain It is certain only if it will
if the that it will not cause
obligation will terminate at damage
terminate at a future time. Obligee’s Obligor Deliver Obligor
all Fault release in its without right
d impaired to payment
Retroactivity Once fulfilled, There is no
state of
it will retroact retroactivity
improveme
to date the because
nt
obligation was there is
Nature/ Obligor Borne by Inures to the
entered into already an
Fortuitou release the benefit of
(NOTE: if it is obligation
s Events d obligee; the obligee
an obligation from the time
cannot
to do or not to the parties
ask for
do, courts will enter in the
damage
determine obligation,
s or
retroactivity) except only
refuse to
in
accept
EXCEPT: prescription
impaired
(i) fruits (Art. (where
object
1187- when prescriptive
period is (CIVIL CODE, art. 1189; DE LEON 135-137 (2014))
the obligation
to deliver counted from
arises), (ii) arrival of the The same effect applies if the resolutory condition
term – i.e., happens and the party obliged cannot return the
prescription
when the object or is improved for the same above reasons.
(from
fulfillment of action could
have been Benefit of the period
condition –
brought). Significance of Period:
when action
a) Obligor cannot be compelled to pay or
could have
perform before the arrival of the period
been brought)
b) Obligee cannot compel payment or
(DE LEON 191 (2014))
performance
Effects before the happening/ arrival of Both are subject to the right of each party to waive
condition/ term – even if the obligor is willing to pay interest for the
• Obligee: May file Protective Action only, such remainder of the period. (JURADO 152-153
as asking for security or requiring escrow of the (2010))
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PRESUMPTION: for the benefit of both parties (e) If no period for the Lease has been set,
(CIVIL CODE, art. 1196; DE LEON 197 (2014)) applicable in specific cases depending on the
length of the lessee’s stay in the premises
It can be given to either party: (CIVIL CODE, art. 1687)
a) To the Debtor or Obligor: By law or by
stipulation (e.g., payable on or before) NOTE: Art. 1197 is only applicable when there is
b) To the Creditor or Obligee: Only by Stipulation absence of any period fixed by the parties. It
(JURADO 152-153 (2010)) requires that period cannot be set arbitrarily by the
courts.
Debtor/obligor may lose the benefit of the period
(therefore may be compelled to pay immediately) in 2-step process to determine if the Court may fix
the following cases (FAt-VISA): the period
a) Debtor becomes Insolvent (when his assets are a) Determine that the obligation does not fix a
less than his liabilities) AFTER the debt has period (or that period is made to depend upon
been contracted will of debtor) but from the nature and
Exception: When he gives security for the circumstances, it can be inferred that a period
obligation was intended
b) Decide what period was probably contemplated
b) Failure to create or establish the security by the parties. (Gregorio Araneta, Inc. v. The
promised; Philippine Sugar Estates Dev. Co., G.R. No. L-
22558)
c) When Security established but is later impaired
(through fault of debtor) or totally lost (due to d. Alternative or Facultative
fault of debtor or fortuitous events). Obligations
Unless: Debtor provides another security of
equal value; Alternative obligations
Initially, the obligation is indeterminate and
d) Violation of any undertaking on the basis of becomes determinate upon making of choice and
which, period is granted; notification. (DE LEON 217 (2014))
e) Debtor Attempts to abscond (mere attempt General Rule: The right to make a choice is
sufficient, because if actual abscondment is to with the debtor/obligor, subject to the rule that he
be awaited, creditor can no longer collect; and cannot choose the impossible, unlawful or could not
have been the object of the obligation. (DE LEON
f) With an Acceleration clause stipulation 218 (2014))
Applies to obligations payable in installments or
based on amortization schedule, where Exception: By contrary stipulation, the right to
stipulation says that failure to pay one or some make a choice may be given to the creditor/obligee
installments or amortizations will entitle creditor or to a 3rd person, subject also to the rule that he
to accelerate payment – i.e., to call for the CANNOT choose the:
payment on the entire remaining unpaid • Impossible
obligation. (CIVIL CODE, art. 1198)
• Unlawful
• Could not have been the object of the
When courts may fix period (ID-JBL)
obligation. (DE LEON 218 (2014))
(a) If the obligation does NOT fix a period, but from
its nature and circumstances it can be Inferred
When Choice is Effective – from notification.
that a period was intended by the parties (CIVIL
(a) Debtor’s Choice: upon notice to creditor
CODE, art. 1197)
(b) Creditor’s Choice: upon notice to debtor
(b) If the duration of the period Depends upon
(c) 3rd Person’s Choice: upon notice to both debtor
the will of the debtor (CIVIL CODE, art. 1197)
and creditor (CIVIL CODE, art. 1200; DE LEON
(c) In case of reciprocal obligations, when there
218 (2014))
is a Just cause for fixing a period (CIVIL CODE,
art. 1191) NOTE: There is no form required for the notice.
(d) If the debtor Binds himself when his means It may be oral or written, express or implied (as when
permit him to do so (CIVIL CODE, art. 1180) debtor delivers one of the choices and creditor
accepts). Mere notice is required, not consent.
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Once choice is made and communicated, it (b) If creditor has right of choice
becomes irrevocable, and converted to a simple CAUSE ONE/SOME ALL
obligation. (JURADO 169 (2010)) Debtor’s Act Creditor may Creditor
choose from entitled to
If the party who has the right to make the choice remaining, or choose the
does not make it or delays, the right does not pass the price of value of any
to the other party – action is specific performance to any object of the objects
compel delivery of ANY prestation. (PINEDA146- destroyed by lost, with
147 (2009)) the debtor, damages
with damages
NOTE: When only one object or prestation is left, it Creditor’s Exercise of Obligation is
becomes a tacit choice. The obligation becomes a Act the right of extinguished
simple obligation. (CIVIL CODE, art. 1202) choice-
creditor may
Effect of loss / impossibility of one, some or all choose the
prestations from
remaining
a) If debtor has right of choice objects
CAUSE ONE/SOME ALL Fortuitous Creditor to Obligation is
Debtor’s Act Exercise of Creditor is Event choose from extinguished
the right of entitled to remaining; if
choice, damages only 1 left –
debtor may based on value becomes a
choose from of the last one simple
remaining lost obligation
Creditor’s Debtor can Debtor is (JURADO 168 (2010))
Act choose (a) entitled to
deliver object resolution or In alternative obligations, various things are due but
from cancellation the delivery or performance of one will extinguish
remaining or plus damages the obligation. (DE LEON 217 (2014))
(b) resolution
or If one of the prestations is illegal, others may be
cancellation valid but obligations remain. (PINEDA 147 (2009))
with
damages If it is impossible to give all except one, the last one
Fortuitous Debtor may Obligation is
must still be given. (4 TOLENTINO 209 (1991))
Event choose from extinguished
remaining
The right to choose may be given either to the
objects; and
debtor or creditor. (JURADO 168 (2010))
if only 1 left –
it becomes a
simple e. Joint and Solidary Obligations
obligation
(JURADO 172-173 (2010)) Involves multiple parties (more than one debtor or
more than one creditor or more than 1 debtors and
NOTE: As long as one choice is left, it becomes a creditors).
simple obligation and if the last object is lost due to
The liability or rights of parties may be joint or
fortuitous events, the obligation is extinguished. (DE
solidary. It is presumed joint. Solidary obligation
LEON 221-222 (2014))
requires either stipulation or law to create the
solidary liability/right. (CIVIL CODE, art. 1207)
In a joint obligation/credit, just divide the

obligation/credit into as many numbers of debtors
and creditors to get the sharing, unless sharing was
stipulated (sharing is presumed equal). (CIVIL
CODE, art. 1208)
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In a joint obligation, each of the joint debtors is only d. If two or more persons have
responsible for his/her own share and each cannot appointed an agent for a common
be made to pay for the share of others, even those transaction or undertaking, they shall
who are insolvent or who have died; joint creditors be solidarily liable to the agent for all
cannot collect the share of the others. (CIVIL CODE, the consequences of the agency.
arts. 1207 & 1209) (CIVIL CODE, art. 1915.)
In a solidary obligation, the solidary debtors can be 3. When the Nature of the obligation requires
made to pay the full amount of the obligation solidarity;
(subject to presentation of available defenses); 4. When a charge or condition is imposed upon
solidary creditors can collect the full amount of the heirs or legatees and the Testament expressly
obligation. (CIVIL CODE, art. 1216) makes the charge or condition in solidum
(Manresa); and
Among solidary debtors and creditors, one who 5. When a solidary responsibility is imputed by a
pays or receives the full amount of the obligation can Final judgment upon several defendants.
recover from or deliver the share of others. (CIVIL (Gutierrez v. Gutierrez, G.R. No. 34840)
CODE, art. 1214 &1217)
Effects of joint liability
JOINT (DIVISIBLE) OBLIGATIONS 1. Demand on one produces delay only with
respect to the debt of the debtor against
Joint obligation (Obligacion Mancomunada) – whom a demand is made.
The whole obligation is to be paid or fulfilled
2. Interruption in payment by one does not
proportionately by different debtors or demanded
benefit or prejudice the other.
proportionately by the different creditors.
3. Each debtor can be held liable only for the
payment of his proportionate share of the
General rule: The presumption is that an
debt.
obligation is always joint. (CIVIL CODE, art.
4. A joint debtor cannot be compelled to answer
1207)
for the acts or liability of the other debtors.
5. Vice of one debtor to creditor has no effect on
Exceptions: (FLENT)
the others.
1. When the obligation Expressly stipulates
solidarity; 6. Insolvency or death of one debtor does NOT
2. When the Law requires solidarity; affect other debtors.
Effects of joint credit

Examples:
1. Each creditor can demand for the payment
a. If two or more heirs take possession
only of his proportionate share of the credit.
of the estate, they shall be solidarily
2. A joint creditor cannot act in representation of
liable for the loss or destruction of a
the other creditors.
thing devised or bequeathed, even
though only one of them should have
NOTE: Unless there is no specification as to their
been negligent. (CIVIL CODE, art. proportionate share in the credit or in the debt, the
927.) creditors and debtors in a joint obligation shall be
b. Even when the agent has exceeded entitled or shall make payment in equal proportion.
his authority, the principal is solidarily
liable with the agent if the former JOINT (INDIVISIBLE) OBLIGATIONS
allowed the latter to act as though he
had full powers. (CIVIL CODE, art. If there are 2 or more debtors, the fulfillment of or
911.) compliance with the obligation requires the
c. All partners are solidarily liable with concurrence of all the debtors, although each for his
the partnership for any crime or own share. (CIVIL CODE, art. 1209) The obligation
quasi-delict committed by any can be enforced only by proceeding against
partner acting in the ordinary course all of the debtors.
of business of the partnership or with
the authority of his copartners. If there are 2 or more creditors, the concurrence
(CIVIL CODE, art.. 1822-1824.) or collective act of all the creditors, although each
for his own share, is also necessary for the
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enforcement of the obligation (CIVIL CODE, art. from the co-debtor only insofar as his payment
1209) exceeded his share in the total obligation. If the
debtor pays less than his share, he cannot demand
The Court pointed out that there’s a loan reimbursement because his payment is less than his
partnership, which means that there should be an actual debt. (Republic Glass Corp. v. Qua, G.R. No.
inclined sharing of losses. However in the JVA, 144413)
there was an agreement that all cash should be paid
by X; SC held that you should apply the rules on Kinds of solidary obligations
partnership rather than the JV contract. (Marsman 1. Active Solidarity
v. Philippine Geonalytics, G.R. No. 183374) 2. Passive Solidarity
3. Mixed Solidarity
Effect of breach 4. Conventional Solidarity
If one of the joint debtors fails to comply with his 5. Legal Solidarity (DE LEON 217-219 (2014))
undertaking, the obligation can no longer be fulfilled
or performed. Consequently, it is converted into one 1. Active Solidarity – solidarity on the part of
of indemnity for damages. Innocent joint debtor shall creditor or obligee
not contribute to the indemnity beyond their (a) Each creditor represents the other in the act of
corresponding share of the obligation. (CIVIL CODE, recovery of payment. (DE LEON 218 (2014))
art.1224)
(b) Credit is divided equally between creditors as
INDIVISIBILITY SOLIDARITY among themselves.
Refers to the prestation Refers to the legal tie
which constitutes the and consequently to (c) Debtor may pay any of the solidary creditors.
object of the obligation the subjects or parties (CIVIL CODE, art. 1214)
of the obligation
Plurality of subjects is Plurality of subjects is (d) Any creditor can collect full amount of
NOT required indispensable obligation. Unless there is an agreement as to
(DE LEON 225 (2014)) which creditor can collect. Debtor must pay to
the creditor who first makes a demand. There is
NOTE: The indivisibility of the prestation does not a case of improper payment if the debtor pays
necessarily import solidarity. They arise from to another creditor who did not make a demand;
different criteria of qualification. Indivisibility has to he can be made to pay again to the creditor who
do with the prestation and its performance. made the demand. (CIVIL CODE, art. 1214)
Solidarity has to do with the parties to an obligation.
(BALANE 257-258 (2020)) (e) After a solidary creditor collects the full amount,
all debtors are released from the obligation. The
SOLIDARY OBLIGATIONS creditor who received payment must then
deliver the shares of the other solidary creditors
Solidary obligation (Obligacion Solidaria) – (presumed equal unless amount indicated).
must be expressed in stipulation or provided by law (CIVIL CODE, art. 1215; 4 TOLENTINO 228
or by nature of obligation. Otherwise, it will be (1991))
considered a joint obligation/credit. (CIVIL CODE,
art.1207) Effect if one of solidary creditor dies: Share is
transmitted to heirs (but collectively)
Words denoting solidarity include “jointly and
severally” (most common); “individually and 2. Passive Solidarity – solidarity on the part of
collectively”; “severally”; “individually”; “collectively”; debtors or obligors
“separately”; “distinctively”, “individually liable” and (a) Any debtor can be made to pay the full
“individually and jointly”. (Ronquillo v. Court of amount of the obligation with the right to
Appeals, G.R. No. L-55138) recover from co-debtors. (CIVIL CODE, art.
1216)
Also, use of pronoun “I” in a promissory note where
several debtors sign denotes solidarity.
(b) The right to make a choice of who among
(PINEDA163-164 (2009); Republic Planters Bank v.
the debtors the creditor will proceed
CA, 216 SCRA 738 (1992))
against, lies on the creditor.
If a solidary debtor pays the obligation in part and is
issued a quitclaim, he can recover reimbursement
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An accommodation party under the law is solidarily the debt for which the others are responsible.
liable based on the Negotiable Instruments Law. (CIVIL CODE, art. 1222)
(Gonzales v. PCIB, G.R. No. 180257)
Once creditor is paid in full, the obligation is
Effect of demand on one solidary debtor: It will extinguished, and the debtor who pays is entitled to
not stop the creditor from going against another reimbursement from others, as if joint (based on
debtor as long as the debt has not yet been paid in agreed sharing or if not, equal). (CIVIL CODE, art.
full. (CIVIL CODE, art. 1216) 1217)
Effect if one of solidary debtor dies: creditor is When one of the solidary debtors cannot, because
not bound to make a claim on the estate of the of his insolvency, reimburse his share to the
deceased debtor within 2-year period under the debtor paying the obligation, such share shall be
Rules of Court since creditor may choose any of the borne by all his co-debtors, in proportion to the debt
living debtors, in which case the 2-year period does of each. (CIVIL CODE, art. 1217)
not apply.
Difference from joint obligation: The share of
Although the Rules of Court mandate that in case of the insolvent debtor is assumed proportionately by
death of a respondent, the claims should be filed in others, in the meantime.
the settlement of estate, the court said that’s a
procedural rule and the rule of the Civil Code on Reimbursement includes interest from date of
solidary liability should prevail — in which case, payment until actual reimbursement, except if
creditor can choose who to sue. (Boston v. CA, G.R. solidary debtor pays before maturity – in which case
No. 173946) interest runs only from maturity.
Effect if several solidary debtors offer to pay: 3. Mixed Solidarity – on the part of the obligors
creditor can choose from anyone or all of them, as and obligees, or the part of the debtors and the
long as he does not collect more than the full creditors (DE LEON 219 (2014))
amount of the obligation.
4. Conventional Solidarity – agreed upon by the
Effect of Prescription: interruption of prescription parties (DE LEON 219 (2014))
to one creditor affects all creditors. (4 TOLENTINO
229 (1991))
5. Legal Solidarity – imposed by law
Examples:
Effect of Delay: interests from delay on one debtor
(a) Obligations arising from tort
is borne by all debtors. (4 TOLENTINO 229 (1991))
a. The responsibility of two or more
persons who are liable for quasi-
Defenses – a solidary debtor when sued can raise
delict is solidary. (CIVIL CODE, art.
the ff. defenses:
2194)
(a) From the nature of obligation – e.g. the
(b) Obligations arising from quasi-contracts
obligation is void, has prescribed, or has
already been paid – the defense is complete: (c) Legal provisions regarding obligation of
debtor sued is not liable, and no one is liable; devisees and legatees
(d) Liability of principals, accomplices, and
(b) Personal to him – may be: (i) complete accessories of a felony
(debtor sued is not liable, but others may be (e) Bailees in commodatum (DE LEON 219-220
sued and the amount that may be collected (2014))
should be less than the share of the debtor with
a personal defense) e.g., minority, vitiated Effects:
consent; or (ii) partial e.g., non arrival of term or No reimbursement if payment is made after
condition – possible even if solidary-debtor prescription or became illegal.
sued is liable for share of others, less his own
share) (4 TOLENTINO 250-251 (1991)) Payment made before debt is due: no interest
can be charged except from maturity, otherwise,
(c) Those which pertains to the share of his interest can be charged from date of payment
co-debtors – with respect to the share which
personally belong to others, the debtor may Insolvency of one: others are liable for share pro-
avail himself thereof only as regards that part of rata
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If different terms and conditions: collect only obligation. As an exception, directors or trustees
what is due, later on collect as and when they and corporate officers may be solidarily liable with
become due or the conditions are fulfilled the corporation for corporate obligations if they
acted “in bad faith or with gross negligence in
Remission made after payment is made: co- directing the corporate affairs.” (Oliveras v. Castillo,
debtor still entitled to reimbursement DE LEON 238- G.R. No. 196251, Jul. 9, 2014)
239 (2014))
NOTE: The law clearly provides that the creditor
Effect of insolvency or death of co-debtor: still who may have executed any acts mentioned in Art.
liable for whole amount 1215 (Novation, Compensation, Merger or
Confusion), as well as he or she who collects the
Fault of any debtor: everyone is responsible to debts, shall be liable to the others for the share in
the creditor – price, damage and interest, but the the obligation corresponding to them. (DE LEON
debtor at fault should reimburse those who paid the 231 (2014))
creditor (DE LEON 240-241 (2014))
f. Obligations with a Penal Clause
Complete/personal defense: total or partial (up
to amount of share only) if NOT personal to him One to which an accessory undertaking is attached
(Braganza v. Villa Abrille, G.R. No. L-12471) for the purpose of insuring its performance by virtue
of which the obligor is bound to pay a stipulated
SOLIDARY DEBTOR SURETY indemnity or perform a stipulated prestation in case
With principal liability can be made to pay of breach. (DE LEON 252 (2014))
only when principal
debtor does not pay Penal cause vs. Condition
PENAL CLAUSE CONDITION
Pays for full amount If he pays the full Serves as accessory NOT a separate
and can seek amount, he may obligation obligation; part of
reimbursement from recover the FULL principal
other solidary debtors amount from principal Demandable in default Never demandable
debtors until the condition
happens
Extension of time Extension of time
granted to other granted to principal Obligation exists No obligation until
solidary debtors w/o his debtor w/o his consent suspensive condition
consent does not releases him happens
release him Depends on the non- Principal itself is
performance of the dependent on an
Can be made to pay Can bind himself for principal obligation uncertain event
the full amount less than the full (PINEDA203 (2009))
amount of the
obligation Obligation with a penal clause vs. Alternative
(DE LEON 222-223 (2014)) obligation
PENAL CLAUSE ALTERNATIVE
Effect of loss or impossibility of the OBLIGATION
prestation: Only 1 prestation Several prestations
(a) If without fault – no liability Impossibility of Impossibility of 1
(b) If with fault – there is liability (also for damage principal extinguishes prestation does NOT
and interest) penalty extinguish the
(c) Loss due to fortuitous event after default – there obligation
is liability (because of default) (PINEDA189 Debtor may not Debtor may choose
(2009)) choose between among the different
principal and penalty prestations
As a rule, corporations are solely liable for their (PINEDA 203 (2009))
obligations. The directors or trustees and officers
are not liable with the corporation even if it is through
their acts that the corporation incurred the
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Obligation with a penal clause vs. Facultative (d) Punitive – established for the purpose of
obligation punishing the obligor or debtor in case of breach
PENAL CLAUSE FACULTATIVE of the obligation
OBLIGATION (e) Subsidiary or alternative- in case of non-
Penalty of payment in Power to choose performance only the penalty is demandable
lieu of the principal prestation is absolute (f) Joint or cumulative – both the principal
must be expressly undertaking and the penalty may be demanded
granted (DE LEON 256 (2014))
Creditor may demand Creditor may not
both if expressly demand both Causes for reduction of penalty
granted principal and (a) Partial/irregular performance
substitute (b) Penalty provided is iniquitous/
(PINEDA 203 (2009)) unconscionable (CIVIL CODE, art. 1229)
Purposes of penalty: Although parties may voluntarily agree on any

1. to insure the performance of the obligation amount of interest, voluntariness does not make
2. to liquidate the amount of damages to be the stipulation on interest valid. A 5% per month,
awarded to the injured party in case of breach or 60% per annum, rate of interest is iniquitous, and
of the principal obligation (compensatory); must be struck down. (Menchavez v. Bermudez,
and G.R. No. 185368)
3. in certain exceptional cases, to punish the
obligor in case of breach of the principal Parties have wide latitude to stipulate any rate of
obligation (punitive). (DE LEON 253 (2014)) interest in view of BSP Circular 905, which
suspended the ceiling on interest effective Jan. 1,
Characteristics 1983. However, whenever interest is
1. Subsidiary – As a general rule, only penalty unconscionable, the courts may declare it illegal.
can be demanded, principal cannot be Compounded interest of 5% monthly, being
demanded, Except: Penalty is joint or iniquitous and unconscionable, is void and
cumulative (Art. 1227), and in monetary inexistent from the very beginning. Thus, the legal
obligations where both principal and interest as rate of 6% per annum must be imposed in lieu of the
a form of penalty may be collected. (DE LEON excessive interest agreed upon by the parties.
259-260 (2014)) (Benavidez v. Salvador, G.R. No. 173331)
COMMENT
2. Exclusive – generally takes place of all
Iniquitous or unconscionable stipulations on interest
damages and interests. (DE LEON 254 (2014))
rates are void, thus it is as if there was no express
contract thereon. Hence, courts may reduce the
Penalty as substitute for damages
interest rate as reason and equity demand.
General rule: the penalty fixed by the parties takes (MCMP Construction v. Monark Equipment
the place of all damages and interests in case of Corp., G.R. No. 201001)
breach. (CIVIL CODE, art. 1226)
Exceptions: (StiRF)
4. EXTINGUISHMENT
1. When by Stipulation of the parties, penalty, IN
Principal Modes of Extinguishment (PaL-
ADDITION to interest, may be collected;
CoCoCo-No)
2. When the debtor is sued for Refusal to pay the
(a) Payment or performance
agreed penalty; and
(b) Loss of the thing due
3. When debtor is guilty of Fraud. (CIVIL CODE, art.
(c) Condonation or remission of debt
1226)
(d) Confusionor merger of rights
Kinds of penalties:
(e) Compensation
(a) Legal – constituted by law
(f) Novation (CIVIL CODE, art. 1231)
(b) Conventional – constituted by agreement of
Other modes of extinguishment
the parties
(c) Compensatory – established for the purpose
(a)Annulment
of indemnifying the damages suffered by the (b)Rescission
obligee or creditor in case of breach of the (c)Fulfillment of resolutory condition
obligation (d)Prescription (CIVIL CODE, art. 1231)
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Not stated in Article 1231 of the Civil Code: o W/O DEBTOR’S CONSENT – Only the
1. Death of a party in personal obligations (4 cost which the third person paid to
TOLENTINO 271 (1991)) creditor and the extent to which the
2. Mutual Desistance (Saura Import & Export Co. debtor benefited from the payment will
v. DBP, GR No. L-24968, Apr. 27, 1972) be the extent of third person’s right to
3. Compromise (CIVIL CODE, art. 2028) collect. [
4. Impossibility of Fulfillment (CIVIL CODE, art. o W/ CONSENT – third person gets all
1184) rights including right against securities,
5. Happening of Fortuitous Event (CIVIL CODE, art. collateral guarantees, etc. (CIVIL CODE,
1165) arts. 1236-1238)
6. Arrival of Resolutory Period (CIVIL CODE, art.
1193) ii. Payee - creditor or obligee at the time payment
is due (includes successor in interest of
a. Payment or Performance transferee since credit is generally assignable)
PRINCIPLES APPLICABLE FOR VALID
PAYMENT OR PERFORMANCE If paid to a 3rd person – Payment is valid only in
any of the ff. cases:
(a) Identity (a) Payment which redounded to the benefit
(b) Integrity or completeness of the obligee
(c) Indivisibility (DE LEON 300-301 (2014)) Instances when the presumption that the
payment redounded to the benefit of the
(a) Principle of identity obligee:
With respect to the prestation or the object – the After payment, 3rd person acquires the
same thing or the same prestation, in the manner creditor’s rights (subrogation)
agreed upon, must be delivered or performed in (1) Creditor ratifies payment to 3rd
order to extinguish the obligation. The obligor person
cannot compel the obligee to accept a different thing (2) By creditor’s conduct, debtor has
or prestation, even if the one offered is more been led to believe that 3rd person
valuable than the one agreed upon. (CIVIL CODE, art. is authorized to receive payment
1244) make the payment (estoppel)
With respect to parties – must be made by proper
party to proper party (b) Payment to the possessor of the credit,
i. Payor - the one who delivers or performs must when made in good faith (CIVIL CODE, art.
be the debtor or anyone interested in the 1242)
fulfillment of the obligation. Any other person Requisites: (GP)
requires the creditor’s consent (CIVIL CODE, art. o Payment by debtor must be made in
1236) Good faith.
o Creditor must be in Possession of the
When there is a 3rd person interested in the credit and NOT merely the evidence of
fulfillment of the obligation – creditor must indebtedness.
accept the payment and debtor need not give
consent. Payment to an incapacitated person, valid if:
(KB)
When a 3rd person not interested in the 1. Incapacitated person Kept the thing delivered,
fulfillment of the obligation pays/performs – or
creditor can refuse to accept, but once 2. Insofar as the payment has been Beneficial to
accepted, the obligation to the creditor is him. (CIVIL CODE, art. 1241)
extinguished. NOTE: There is full subrogation if
the debtor consented to the payment by the 3rd Rules on payment by an incapacitated person
person (unless he intended it to be a donation). As a general rule, payment by one who does not
In the absence of consent by the debtor, the 3rd have the free disposition of the thing due or capacity
person is entitled only to reimbursement of the to alienate it is not valid. This means that the thing
payment made, to the extent that the debtor has paid can be recovered.
been benefitted
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EXCEPTION: Art. 1427 provides that when a minor deficiency that cause no serious harm to the
between eighteen and twenty-one years of age who obligee. (International Hotel Corporation v. Joaquin
has entered into a contract without the consent of Jr., G.R. No. 158361)
the parent or guardian, voluntarily pays a sum of
money or delivers a fungible thing in fulfillment of the Requisites of substantial performance
obligation, there shall be no right to recover the (GoSTeM):
same from the obligee who has spent or consumed 1. Attempt in Good faith to perform without willful
it in good faith. (DE LEON 287 (2019)) or intentional departure
2. Deviation is Slight
Where payment should be made 3. Omission/Defect is Technical or unimportant
(a) In the place designated in the obligation 4. Must not be so Material that intention of parties
(b) If there is no express stipulation and the is not attained. (International Hotel Corporation
undertaking is to deliver a specific thing – at the v. Joaquin Jr., G.R. No. 158361)
place where the thing might be at the moment
the obligation was constituted Acceptance by the obligee as full
(c) In other case – in the place of the domicile of • When the obligee accepts the performance,
the debtor (CIVIL CODE, art. 1251) knowing its incompleteness or irregularity, and
WITHOUT expressing any protest or objection,
When to pay: Generally, upon demand. (See the obligation is deemed fully complied with.
previous discussions when demand is not This is because the obligee is deemed to have
necessary) waived his right to collect the deficiency. (CIVIL
CODE, art. 1235)
(b) Principle of integrity (CIVIL CODE, art. 1233)
• Unlike Art. 1234 where the obligee does not
General rule: A debt shall not be deemed paid give up his right to collect the balance, in Art.
UNLESS the thing or service of which the obligation 1235, the obligee waives his right to collect such
consists of has been completely delivered or balance.
rendered, as the case maybe. (CIVIL CODE, art.
1233) Divisible obligations
An obligation that is capable of partial performance.
Exceptions: (PINEDA 192-193 (2009))
1. When the obligation has been substantially (a) Execution of certain number of days’ work
performed in good faith CIVIL CODE, art. 1234); (b) Expressed by metrical units
2. When the obligee accepts performance despite (c) Nature of obligation – susceptible of partial
its incompleteness or irregularity and without fulfillment (DE LEON 250 (2014))
expressing any protest or correction. (CIVIL
CODE, art. 1235);
3. In cases involving divisible obligations capable (c) Indivisible Obligations
of partial performance. (PINEDA 192-193
(2009)). One not capable of partial performance.
(a) To give definite things
Substantial performance (b) Not susceptible of partial performance
If the obligation has been substantially performed (c) Provided by law
in good faith, the obligor may recover as though (d) Intention of parties (DE LEON 249,
there had been a strict and complete fulfillment, less 2014))
damages suffered by the obligee. This is the basis
of the rule that if the breach is only slight, the obligee NOTES:
cannot resolve or cancel the obligation. Generally, • Divisibility or indivisibility of the obligation
the courts will grant the obligor a certain time to refers to the performance of the prestation and
make up for the slight breach. The “damages not to the thing which is the object thereof (DE
suffered by the obligee” refers to the deficiency LEON 249, 2014))
which the obligee is still entitled to collect. (CIVIL • Intention of parties should be taken into
CODE, art. 1234; 4 TOLENTINO 277 (1991)) account to determine whether obligation is
divisible or not (DE LEON 244, 2014))
Substantial performance is applied only when the
obligor admits breaching the contract after honestly
and faithfully performing all the material elements
thereof except for some technical aspects or
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SPECIAL RULES ON MONETARY discharged in Philippine Pesos at rate of exchange

OBLIGATIONS (LOANS AND FORBEARANCE at the time of payment. (Union Bank v. Tui, G.R. No.
OF MONEY, GOODS, AND CREDITS) 173090)
Forbearance of money, goods and is defined as (b) Extraordinary Inflation or Deflation

“arrangements other than loan agreements where a
person acquiesces to the temporary use of his In cases of extraordinary inflation or deflation, the
money, goods or credits pending the happening of value of the currency at the time the obligation was
certain events or fulfillment of certain conditions.” incurred should be the basis of payment, unless
(Estores v. Supangan, G.R. No. 175139) there is stipulation to the contrary. (CIVIL CODE, art.
1250)
(a) Payment must be in legal tender (CIVIL CODE,
art. 1249) Inflation (or deflation) rates are determined by
economic managers (BSP specifically), but
Personal checks, Cashier’s or Managers checks are whether extraordinary, this will require judicial
NOT legal tender, so creditor cannot be compelled determination. The Court has ruled that whoever
to accept them (unless such is stipulated as the alleges extraordinary inflation must prove it –
mode of payment). Creditor, however, has the indicating that the courts will determine based on
option to accept payment in checks of any kind. If evidence presented. (Citibank v. Sabeniano, G.R.
the creditor accepts the check or no prompt No. 156132)
objection to the form of payment is made, there is
valid tender of payment and creditor can no longer Requisites for the application of Art. 1250 on
claim later that payment is not in legal tender. extraordinary inflation/deflation:
(Pabugais v. Sahijwani, G.R. No. 156846) 1. There is an official declaration of extraordinary
inflation or deflation from the BSP
When payment in check is accepted, it produces 2. The obligation is contractual in nature
the effect of payment only when the check is 3. The parties expressly agreed to consider the
cleared (retroacts to the date the check was effects of the extraordinary inflation or deflation.
deposited) and the funds are transferred to the (DE LEON 311 (2014)); see Equitable PCI Bank
account of the creditor. Stale checks (those not v. Sheung Ngor, G.R. No. 171545)
presented for payment within 6 months from date of
check) do not produce the effect of payment and NOTE: Inflation or deflation is based on increase
debtor can be required to issue a new check or pay or decrease of purchasing power and not based on
in cash since the obligation is not yet deemed paid. Peso-US Dollar exchange rate. (Singson v. Caltex,
Debtor cannot however be liable for interest or G.R. No. 137798, Oct. 4, 2000). The rate of
penalty and cannot be declared in default since inflation/deflation is measured by determining rate of
creditor could have immediately presented it for increase or decrease of purchasing power from a
payment. It is only in cases where the value is prior period. It is determined by the amount of basic
impaired through creditor’s fault (i.e., creditor goods (within a basket) that money can buy, as
misplaced the check and someone else encashed compared to a prior period. If money can buy P100
it), that the debtor is deemed to have paid his of basic goods at a certain prior period, determine
obligation without having to issue a new check or how much of the same goods can be purchased at
paying in cash. (Evangelista v. Screenex, Inc., G.R. a later period – this represents the rate of inflation or
No. 211564) deflation. (Citibank v. Sabeniano, G.R. No. 156132)
Payment in coins is legal tender only up to a Example:

certain amount: A loan of P100 was obtained in 2013, and
for P1, 5 and 10 coins, only up to P1,000; payable after one year. At the time the
for P.01, .05, .10, and .25 coins, only up to P 100. obligation was incurred, the P100 proceeds
(BSP Circular No. 537, Series of 2006, July 18, of the loan could purchase P100 worth of
2006)) goods. In 2014 when the loan is due, P100
can purchase only ½ of the goods it could
Payment in foreign currency is allowed, if purchase in 2013. Inflation rate is therefore
stipulated. The Uniform Currency Act (1950) was 100%.
expressly repealed by R.A. No. 8183 (effective July
5, 1996). Art. 1249 allowing stipulation of payment If there is no declaration of extraordinary
in foreign currency has been restored. Agreements inflation – Debtor must pay P100 in 2014.
with stipulation to pay foreign currency may be
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If courts declare extraordinary inflation – • By way of penalty (debtor in default)

Debtor must pay P200 in 2014 so that i. With penalty clause – substitutes
creditor will get the same value of his payment of interest, except if it is clearly
money in 2013 when he lent the money. stipulated that penalty is in addition to
interest. (CIVIL CODE, art. 1226)
(c) Payment of Interest ii. Without penalty clause (even if no

interest is stipulated) – collect legal rate
NOTE: In loan, ownership is transferred to the of interest by way of penalty for default (no
borrower. Creditor merely has the right to an equal more distinction, see above). Liability
amount of the same kind and quality. (CIVIL CODE, arises only from default (unless demand
art. 1953) not necessary, from extrajudicial or judicial
demand). (Eastern Shipping Lines, Inc. v.
Rules on payment of interest Court of Appeals, G.R. No. 97412)
• For use of money, no default
i. Stipulation in writing is required – if NOTE: No penalty is collectible during grace
none, no interest is collectible (CIVIL CODE, period because debtor is not in default if he is
art. 1956) given time to pay.
ii. With stipulation in writing, but the iii. Compounded interest (interest over
interest rate is not stipulated – interest is interest) – applies only if stipulated, or in
legal rate of 6% per annum for loans and case of judicial demand. (CIVIL CODE, art.
forbearance of money (decrease from 12% 1959 & 2212),
to 6% based on BSP Circular 799, effective
July 1, 2013). The legal rate of interest now Interest due on the principal amount accruing as
is the same for all obligations, including of judicial demand shall SEPARATELY earn
judgment obligations not arising from loans, legal interest at the prevailing rate prescribed by
forbearance of money, goods or credits, the Bangko Sentral ng Pilipinas, from the time
including those based on torts. (BSP of judicial demand UNTIL FULL PAYMENT.
Circular No. 799, Series of 2013, June 21, (Lara’s Gifts and Decors v. Midtown Industrial,
2013) G.R. No. 225433)
NOTE: In the absence of an express stipulation • Judgment Debt (Not arising from loans or
as to the rate of interest that would govern the forbearance of money, such as torts)
parties, the rate of legal interest for loans or
forbearance of any money, goods or credits and Except in cases where the amount can be
the rate allowed in judgments shall no longer be determined with reasonable certainty, the
twelve percent (12%) per annum but will now be amount of obligation may still be unliquidated
six percent (6%) per annum effective July 1, and not yet determined upon filing of the case.
2013. It should be noted, nonetheless, that the The liquidation or the determination of the
new rate could only be applied prospectively amount of the obligation takes place only from
and not retroactively. Consequently, the twelve the time judgment is rendered in the first
percent (12%) per annum legal interest shall instance. Thus:
apply only until June 30, 2013. Come July 1, i. If the amount of the obligation can be
2013 the new rate of six percent (6%) per established with reasonable certainty,
annum shall be the prevailing rate of interest the interest runs from extrajudicial or
when applicable. (Nacar v. Gallery Frames, judicial demand (default) – [at the discretion
G.R. No. 189871; See also Lim v. HMRPI, G.R. of the court] at the rate of 6% p/a, up to time
No. 201483, Aug. 4, 2014) decision becomes final and until fully paid.
(Republic v. de Guzman, G.R. No. 175021)
iii. With stipulation in writing, and the rate
has been stipulated – collect the ii. If the amount of the obligation cannot be
stipulated rate of interest, subject to the established with reasonable certainty,
right of the courts to reduce the rate if interest will run only from the time judgment
unconscionable or iniquitous. (State is rendered in the first instance at the rate
Investment House, Inc. v. Court of Appeals, 6% up to time of payment. (Eastern
G.R. No. 112590, Jul. 12, 2001) Shipping Lines, Inc. v. Court of Appeals,
G.R. No. 97412)
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SPECIAL RULES/FORMS OF PAYMENT A: Article 1176 should be treated as a general

presumption subject to the more specific
(a) Application of payments presumption under Article 1253. Article 1176
The designation of the debt which payment shall be applies when there is doubt as to whether interest is
made, out of 2 or more debts owing the same waived because the creditor accepts the payment
creditor. (CIVIL CODE, art. 1252) for the principal without reservation with respect to
the interest. Here, the creditor is presumed to have
Requisites (OTD) waived the right to collect interest. Article 1254 has
1. There must be only One debtor and only one no issue on waiver of interest because it is a given
creditor; under this Article that the debt produces interest.
2. Two or more debts of the same kind; and The doubt is on whether the amount received by the
3. All debts must be Due. (CIVIL CODE, art. 1252) creditor is payment for the principal or the interest.
Article 1253 resolves this doubt by providing a
Exception on 3rd requisite: There may be hierarchy: payments shall first be applied to the
application of payment even if all debts are not interest; payment shall then be applied to the
yet due if: principal only after the interest has been fully paid.
i. Parties so stipulate (Marquez v. Elisan Credit Corporation, G.R. No.
ii. When application of payment is made by 194642)
the party for whose benefit the term has
been constituted (CIVIL CODE, art. 1252) (b) Dation in payment (Dacion en pago) (CIVIL
CODE, art. 1245)
How application is made:
(a) Debtor makes the designation Definition – a mode of extinguishing an obligation
(b) If not, creditor proposes to make the application whereby the debtor pays a monetary obligation with
by advising the debtor or through certain acts property. It is a special form of payment because
such as issuing a receipt with an application of one element of payment is missing: Identity.
payment. Since this is a mere proposal (since (PARAS 380 (2016))
only a debtor can make an application of
payments), the debtor must accept it either Dation in payment extinguishes the obligation to
expressly or impliedly by not objecting to the the extent of the value of the thing delivered, either
creditor’s proposal, as when the debtor accepts as agreed upon by the parties or as may be proved,
without objection the receipt issued by the unless the parties by agreement – express or
creditor with an application of payment. implied, or by their silence – consider the thing as
(c) If the debtor makes no application and the equivalent to the obligation, in which case the
creditor has not made a proposal, or if the obligation is totally extinguished. (Tan Shuy v.
application is not valid, then application is made Maulawin, , G.R. No. 190375)
by operation of law:
i. It is to be applied to the most onerous debt The contractual intention determines whether the
(e.g., to an interest bearing debt over debts property subject of the dation will be considered as
without interest; to a debt secured by a the full equivalent of the debt and will therefore
mortgage over a debt that is unsecured); or serve as full satisfaction for the debt. (Luzon Dev
ii. If all debts are equally onerous or of the Bank v. Enriquez, G.R. No. 168646)
same burden, or it cannot be determined
which debt is the most onerous, then the Law on Sales Apply
payment should be applied pro rata to all The law on sales will apply in case of dacion en pago
the obligations due. (CIVIL CODE, art. 1252- since it partakes of the nature of sale – with the
1254) creditor purchasing the thing or property of the
debtor, the payment of which is charged to the
Q: Article 1176 provides that: “The receipt of the debtor’s obligation. It extinguishes the obligation to
principal by the creditor, without reservation with the extent of the value of the thing delivered. (Tan
respect to the interest, shall give rise to the Shuy v. Maulawin, , G.R. No. 190375)
presumption that said interest has been paid.”
Article 1253 states that: “If the debt produces As in a contract of sale, valuation should be agreed
interest, payment of the principal shall not be upon by the creditor as buyer, and the debtor as
deemed to have been made until the interests have seller. It is also subject to the usual warranties of
been covered.” How are these two rebuttable sale. (4 TOLENTINO 294 (1991))
presumptions reconciled?
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Requisites: (PAD) Effects of Assignment

1. There must be the Performance of the (a) Creditors do not become the owner of the
prestation in lieu of payment which may consist properties; they are merely assignees with
in the delivery of a corporeal thing or a real right authority to sell (hence, the legal contract
or a credit against the third person involved is one of Agency and not Sale);
2. There must be some Difference between the (b) Debtor is released up to the amount of the net
prestation due and that which is given in proceeds of the sale, UNLESS there is a
substitution stipulation to the contrary
3. There must be an Agreement between the (c) Creditors will collect credits in the order of
creditor and debtor that the obligation is preference agreed upon, or in default of
immediately extinguished (to the extent of agreement, in the order ordinarily established
agreed valuation) by reason of the performance by law (PARAS 417-418 (2016))
of a prestation different from that due. (DE
LEON 321 (2014)) Dation in Payment v. Cession in Payment
DATION IN CESSION IN
Intent is Controlling PAYMENT PAYMENT
Like in all contracts, the intention of the parties to the (Art. 1245) (Art. 1255)
dation in payment is paramount and controlling. The One creditor Plurality of creditors
contractual intention determines whether the NOT necessarily in Debtor must be
property subject of the dation will be considered as state of financial insolvent
the full equivalent of the debt and will therefore difficulty
serve as full satisfaction for the debt. “The dation in Thing delivered is Universality of property
payment extinguishes the obligation to the extent of considered as of debtor is what is
the value of the thing delivered, either as agreed equivalent of ceded
upon by the parties or as may be proved, unless the performance
parties by agreement, express or implied, or by their Payment extinguishes Merely releases debtor
silence, consider the thing as equivalent to the obligation to the extent up to the net proceeds
obligation, in which case the obligation is totally of the value of the thing of things ceded or
extinguished.” (Luzon Development Bank v. delivered as agreed assigned, unless there
Enriquez, G.R. No. 168646) upon is a contrary intention
(DE LEON 356-357 (2014))
(c) Cession or Assignment (in favor of
creditors) (CIVIL CODE, art. 1255) (d) Tender of payment and Consignation (CIVIL
CODE, art. 1256)
The process by which a debtor transfers ALL his
assets which are not subject to execution in favor of Tender
creditors, so that the latter may sell them and apply The act of offering to the creditor what is due him
the proceeds to his outstanding obligations. Except together with a demand that the creditor accepts the
if there is contrary agreement, or as may be same. (PARAS 419 (2016))
provided by law, the obligations are extinguished
only up to the net amount of the proceeds of the If the creditor refuses w/o just cause to accept
sale. (PARAS 417 (2016)) payment, he becomes in mora accipiendi and tender
alone will not extinguish the obligation; consignation
Kinds of Assignment is needed. (Co v. PNB, G.R. No. L-51767)
1. Legal – governed by the insolvency law
2. Voluntary – agreement of creditors (PARAS Consignation
417 (2016)) The act of depositing the thing due with the court or
judicial authorities whenever the creditor refuses to
Requisites of Voluntary Assignment: (DACCI) accept payment, and generally requires prior tender
1. More than one Debt of payment. (RUBEN E. AGPALO, OBLIGATIONS AND
2. More than one Creditor CONTRACTS 185 (2008))
3. Insolvency of debtor
4. Abandonment of all debtor’s property not Requisites of Valid Consignation (VUPAS)
exempt from execution 1. Existence of Valid debt;
5. Acceptance or Consent on the part of the 2. Creditor has Unjustifiably refused to accept
creditors (PARAS 417 (2016)) payment, i.e., previous valid tender;
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3. Prior notice of Consignation had been given to

the person interested in performance of LOSS OF THE THING DUE
obligation (1st notice) (CIVIL CODE, art. 1257)
4. Actual deposit/consignation with proper judicial (a) When the object perishes (physically)
authorities (b) When it goes out of commerce
5. Subsequent notice of Consignation (2nd notice) (c) When it disappears in such a way that: its
(DE LEON 359-360 (2014)) existence is unknown or it cannot be recovered
Exception on 2nd requirement, i.e., where
consignation w/o prior tender allowed (CIVIL Effect of Loss in Obligation to Deliver a
CODE, art. 1256): Specific Thing
i. Creditor absent or unknown/ does not appear at If loss was due to fortuitous events, obligation is
the place of payment extinguished; no damages.
ii. Incapacitated to receive payment at the time it
is due If the loss is due to the fault of the debtor or any
iii. Refuses to issue receipt w/o just cause person, that person should be held liable for
iv. 2 or more creditors claiming the same right to damages. (PARAS 438 (2016))
collect
v. Title of obligation has been lost Effect of Loss in Obligation to Deliver a Generic
vi. Debtor had previously been notified by the Thing
creditor that the latter would not accept any General rule: Loss does NOT extinguish obligation.
payment (Kapisanan Banahaw, Inc. v. Dejarme, Genus numguam perit: “Genus never perishes.”
G.R. No. L-32908)
Exceptions:
Effects of Consignation i. Loss of entire genus (e.g., when sale of a
(a) Debtor may ask judge to order cancellation of certain class of things become illegal)
obligation ii. Loss of entire group of limited generic
(b) Running of interest is suspended obligation (e.g., I will deliver “one of my
(c) Before creditor accepts or before judge cars” and all cars are no lost through force
declares consignation has been properly made, majeure. (See BALANE 400 (2020)
obligation remains (debtor bears risk of loss at
the meantime, and after acceptance by creditor Effect of Partial Loss
or after judge declares that consignation has 1. When loss is significant – may be enough to
been properly made – risk of loss is shifted to extinguish obligation
creditor) (PARAS 433 (2016)) 2. When loss insignificant – NOT enough to
extinguish obligation (DE LEON 377 (2014))
When Consignation Extinguishes Obligation
Consignation is completed at the time the creditor NOTE: When thing is lost in the possession of the
accepts the same without objections, OR, if he debtor, it is presumed to be due to debtor’s fault;
objects, at the time the court declares that it has Exceptions: natural calamity, earthquake, flood,
been validly made in accordance with law. (Dalton storm. (CIVIL CODE, art. 1265)
v. FGR Realty and Development Corporation, G.R.
No. 172577) IMPOSSIBILITY OF PERFORMANCE
Tender of payment vs. Consignation (a) Physical impossibility – it is not within man’s
TENDER OF CONSIGNATION capability
PAYMENT (b) Legal impossibility – when the prestation is
Antecedent act; Principal act; produces prohibited by law
preparatory the effects of payment (c) Moral impossibility – when the service has
Extrajudicial Judicial become so burdensome that it could not have
(PARAS 419-420 (2016)) been the intention of the parties (CIVIL CODE, art.
1267)
b. Loss of Determinable Thing Due or
Effect of Subsequent Impossibility of
Impossibility or Difficulty of Performance in Obligation to Do
Performance Debtor is released when the prestation becomes
legally or physically impossible without fault on the
Includes partial or total loss of thing (CIVIL CODE, part of the debtor. (CIVIL CODE, art. 1266)
arts. 1262 & 1264)
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of the contract. (Occena v. Hon. Jabson, G.R. No.

NOTE: The obligation must be possible and legal L-44349)
when agreed upon by the parties. The impossibility
must occur after the constitution of the obligation. Art. 1267 is not restricted to obligations to do. The
Otherwise, the obligation is void from the beginning term “service” should be understood as referring to
and there is nothing to be extinguished. (DE LEON the “performance of the obligation”, a phrase which
364 (2019)) encompasses all obligations. (NATELCO v. Court of
Appeals, G.R. No. 107112)
NOTE:
• Judicial determination of extent is necessary Mere inconvenience, unexpected impediments,
increased expenses, or even pecuniary inability to
• Doctrine of Unforeseen Events: The court is fulfill an engagement, will not relieve the obligor from
authorized to release the obligor, in whole or in an undertaking that it has knowingly and freely
part, when the service has become so difficult contracted. The closure of respondent's business
as to be manifestly beyond the contemplation of was neither a fortuitous nor an unforeseen event
the parties. (CIVIL CODE, art. 1267; DE LEON that rendered the lease agreement functus officio.
389 (2014)) (Sps Poon v. Prime Savings Bank, G.R. No.
183794)
• Doctrine of Subjective Impossibility: The
obligation undoubtedly becomes impossible if c. Condonation or Remission of Debt
there is no physical or legal loss but the object
obligation belongs to another person; the Condonation – An act of liberality by which the
obligor must indemnify the obligee for the creditor renounces the enforcement of the obligation
damages suffered by the latter. (4 TOLENTINO contracted in his favor. To condone is to forgive or
336 (1991)) to remit a debt. (Bañez v. Young, L-4635)
• Rebus Sic Stantibus: The agreement is valid Remission – An act of liberality by virtue of which
only if the same conditions prevailing at time of the obligee, without receiving any price or
contracting continue to exist at the time of equivalent, renounces the enforcement of the
performance. Obligor may be released in whole obligation, as a result of which it is extinguished in
or in part if the conditions have changed so that its entirety or in that part or aspect of the same to
it becomes manifestly beyond the intention of which the remission refers (Manresa). In brief, “it is
the parties. (4 TOLENTINO 336 (1991)) the gratuitous abandonment by the creditor of his
right” (4 TOLENTINO 353 (1991))
Requisites of Rebus Sic Stantibus: (FoDAF)
1. The event or change could not have been Requisites (CapRe-FLAgS)
Foreseen at the time of the execution of the 1. There must be an Agreement
contract 2. There must be a Subject matter (object of the
2. The performance is extremely Difficult, but NOT remission, otherwise there would be nothing to
impossible (because if it is impossible, it is condone)
extinguished by impossibility) 3. Cause of consideration must be Liberality
3. The event was not due to the Act of any of the (Essentially gratuitous, an act of liberality)
parties 4. Parties must be Capacitated and must consent;
4. The contract is for a Future prestation (4 requires acceptance by obligor; implied in
TOLENTINO 347 (1991)) mortis causa and express in inter vivos
condonations.
The difficulty of performance contemplated should 5. Formalities of a donation are required in the
be such that one party would be placed at a case of an express remission or condonation
disadvantage by the unforeseen event. Mere 6. Revocable – subject to rule on inofficious
inconvenience, or unexpected impediments, or donations. (PARAS 448 (2016))
increased expenses did not suffice to relieve the
debtor from a bad bargain. (Tagaytay Realty v. Examples of Implied Condonation, Waiver of
Gacutan G.R. No. 160033) Right to Collect
i. Voluntary delivery of evidence of
Article 1267 grants the courts the power of relief, but indebtedness – when evidence of
not of revision. The Courts do not have the authority indebtedness is found in the possession of the
to remake, modify or revise the terms and conditions debtor – there is a rebuttable presumption of
voluntary delivery (CIVIL CODE, art. 1272), which
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if not rebutted, will create the presumption of 5. Neither debt must be retained in a controversy
waiver condonation (remission) which in effect commenced by Third person and
extinguishes the debt. (CIVIL CODE, art. 1271 communicated w/ debtor (neither debt is
(1)) garnished). (CIVIL CODE, art. 1279)
EXCEPTION: when the waiver is inofficious. A claim is liquidated when the amount and time of
(CIVIL CODE, art. 1271 (2)) payment is fixed. If acknowledged by the debtor,
although not in writing, the claim must be treated as
Defense to the claim of inofficiousness: the liquidated. When the defendant, who has an
delivery of the document was made in virtue of unliquidated claim, sets it up by way of counterclaim,
payment of the debt. (CIVIL CODE, art. 1271 (2)) and a judgment is rendered liquidating such claim, it
can be compensated against the plaintiff’s claim
ii. If there if actual proof, or the presumption above from the moment it is liquidated by judgment.
is not rebutted, that the evidence of Compensation takes place only if both obligations
indebtedness was returned by the creditor to are liquidated. (Lao v. Special Plans, Inc., G.R. No.
the debtor, there is a presumption of waiver 164791)
(a) If in hands of joint debtor – only his share is
condoned. Kinds of Compensation
(b) If in hands of solidary debtor – whole debt (a) Legal – by operation of law; as long as 5
is condoned. requisites concur – even if unknown to parties;
(c) Tacit – voluntary destruction of instrument if not equal debts, only up to concurring amount.
by creditor; made to prescribe w/o • Legal compensation takes place by
demanding. (CIVIL CODE, art. 1271) operation of law when all the requisites are
present, as opposed to conventional
d. Confusion subrogation which takes place when the
parties agree to compensate their mutual
The character of debtor and creditor is merged in obligations even in the absence of some of
same person with respect to same obligation. the requirements.
(JURADO 306 (2010))
(b) Conventional – based on agreement of
Requisites of Merger of Rights: (COP) parties, even if the other requirements are not
1. It must take place between Principal debtor and complied with.
principal creditor only. • Conventional compensation takes place
2. Merger must be Clear and definite. when the parties agree to compensate their
3. Only One obligation is involved. (PARAS 456 mutual obligations even in the absence of
(2016)) some requisites. (Mondragon Personal
Sales Inc. v. Sola Jr., G.R. No. 174882)
Confusion does not extinguish a joint obligation,
except as regards the share corresponding to the (c) Facultative – only one party may invoke the
creditor or debtor in whom the 2 characters concur. compensation, such as the person who has the
(CIVIL CODE, art. 1277) benefit of the period who can invoke it even
before the period has arrived.
e. Compensation
(d) Judicial – set off takes place upon order of the
court; needs pleading and proof; all
A mode of extinguishment up to the concurrent requirements must concur, EXCEPT
amount of the obligation of persons who, in their liquidation.
own right, have become mutual debtors or creditors
of one another. (JURADO 309 (2010)) (e) Total – when 2 debts are of the same amount.
Requisites (LM-STD): (f) Partial –when 2 debts are not of the same
1. Both parties must be Mutual creditors and amount. (PARAS 461 (2016))
debtors - in their own right and as principals.
2. Both debts must consist in Sum of money or if Effect of Assignment of Credit to Third Person:
consumable, of the same kind or quality. Can There Still be Compensation?
3. Both debts are Due. 1. If made after legal compensation has set in
4. Both debts are Liquidated and demandable – no effect; compensation has already
(determined).
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extinguished the obligation, so there is nothing

to assign. f. Novation
2. If made before legal compensation has set
in: Novation - Extinguishment of obligation by creating/
(a) With consent of debtor – debtor is estopped substituting a new one in its place
UNLESS he reserves his right to (a) Changing object or principal conditions
compensate and gave notice to assignee (b) Substituting person of debtor
(b) With knowledge but w/o consent of debtor (c) Subrogating 3rd person to the rights of the
– compensation may be set up as to debts creditor (CIVIL CODE, art. 1291)
maturing prior to assignment
(c) W/o knowledge – compensation may be Requisites of novation: (VICN)
set-up on all debts prior to his knowledge 1. There must be a previous Valid obligation;
(CIVIL CODE, art. 1285) 2. Intent to extinguish the old and substitute it with
the new obligation, whether expressed, or
Compensation vs. Confusion implied as when the two obligations are
COMPENSATION CONFUSION inconsistent and cannot stand together.
Different persons are Only 1 person who is 3. Capacity and consent of the parties to the new
involved; each is a creditor and debtor of obligation; and
debtor and creditor of himself 4. Valid New obligation. (Garcia, Jr. v. CA, G.R.
each other No. 80201)
Two obligations One obligation
Indirect payment No need to pay oneself Novation is never presumed, there must be an
(DE LEON 416-417 (2014)) express intention to novate. The creditor’s
acceptance of another check, which replaced an
Obligations not allowed to be Compensated earlier dishonored check, does not result in novation
(Co-PGT) where there was no express agreement to establish
(a) When one of the debts arises from a depositum that the debtor was already discharged from his
or from the obligations of a depositary or of a liability. (Salazar v. J.Y. Brothers Marketing
bailee in Commodatum. (CIVIL CODE, art. 1287) Corporation, G.R. No. 171998)
a. BUT NOTE: Only the bailor or
depositor is allowed to invoke legal Novation can be done without the knowledge or
compensation (DE LEON 420-421 even against the will of the original debtor, but not
(2019)) without the consent of the creditor (Interport
(b) Against a creditor who has a claim for support Resources Corporation v. Securities Specialist, In.
due by Gratuitous title, without prejudice to G.R. No. 154069)
Article 301 par. 2 (CIVIL CODE, art. 1287)
(c) If one of the debts consists in civil liability arising Effects of Novation
from a Penal offense. (CIVIL CODE, art. 1288) GR: It extinguishes the old obligation and a new
a. BUT NOTE: The bailor or depositor is one is created in its place.
allowed to invoke legal compensation Exception:
(DE LEON 422 (2019)) (a) Modificatory novation only, in which case
(d) Obligation to pay Taxes is not compensable the old obligation remains, as amended by
with the government’s obligations to the the new (Swagman Hotels and Travels, Inc.
taxpayer. (Francia v. IAC, G.R. No. L-67649). v. CA, G.R. No. 161135)
(b) Old obligation is void
Taxes cannot be subject to compensation for the Conversely, the old obligation subsists if
simple reason that the government and the taxpayer the new obligation is void or is voidable and
are not creditors and debtors of each other. There is later annulled. (4 TOLENTINO 397 (1991))
a material distinction between a tax and debt. Debts
are due to the Government in its corporate capacity, Novation, in its broad concept, may either be
while taxes are due to the Government in its extinctive or modificatory.
sovereign capacity. (United Airlines, Inc. v. • It is extinctive when an old obligation is
Commissioner of Internal Revenue, G.R. No. terminated by the creation of a new obligation
178788) that takes the place of the former; it is merely
modificatory when the old obligation subsists to
the extent that it remains compatible with the
amendatory agreement.
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• An extinctive novation results either by debtor only becomes a co-debtor and no

changing the object or principal conditions novation takes place.
(objective or real), or by substituting the person
of the debtor or subrogating a third person in the ii. Delegacion: initiative of old debtor who
rights of the creditor (subjective or personal). “delegates” his obligation to a new
(Banate v. Philippine Countryside Rural Bank debtor; In this case all the parties must
(Liloan, Cebu), Inc., G.R. No. 163825) consent. The old debtor’s liability is
generally not revived in case of the
There is novation when there is an irreconcilable insolvency of the old debtor UNLESS: the
incompatibility between the old and new obligations. new debtor’s insolvency already existed at
There is no novation in case of only slight the time of the delegacion AND (1) it was of
modifications, in which case, the old obligation still public knowledge, or (2) the old debtor
subsists. (Heirs of Franco v. Spouses Gonzales, knew of the insolvency of the new debtor at
G.R. No. 159709) the time of delegacion. (PINEDA 341 (2009))
Novation does not extinguish criminal liability Parties:

(Philippine National Bank v. Soriano, G.R. 164051) (a) Delegante – old debtor
(b) Delegatario – creditor
Effect of Conditions in Either Old or New (c) Delegado – new debtor. (PARAS 508
Obligation: (2016))
(a) If old obligation is conditional
i. If resolutory and it occurred – old Expromision vs. Delegacion
obligation already extinguished; no new EXPROMISION DELEGACION
obligation is created since there is nothing Intention: old debtor be released from the
to novate obligation
ii. If suspensive – the condition must Consent of creditor required on both
happen, otherwise there is no old obligation Consent of creditor and Consent of debtor
to novate. (4 TOLENTINO 399 (1991)) third person (initiates), creditor
and third person;
(b) If the new obligation is conditional: need NOT be given
i. If resolutory – valid simultaneously
ii. If suspensive – the condition must Governed by the rules of Same applies in the
happen, otherwise there is no new payment by third persons absence of an
obligation to replace the old, so that the old agreement
obligation remains subsisting. (4 If w/o knowledge of Subrogation
TOLENTINO 397 (1991)) debtor, beneficial
reimbursement, no
Kinds of Novation: subrogation
(a) Real / objective – When there is a change in New debtor's insolvency Same UNLESS the
the object, cause/consideration or principal does NOT make old new debtor’s
condition. (PINEDA 332 (2009)) debtor liable insolvency already
(b) Personal / subjective existed at the time of
Substituting person of debtor (passive). the delegacion AND
(PINEDA 332 (2009)) (i) it was of public
knowledge, or (ii) the
i. Expromision: initiative is from a 3rd old debtor knew of
person or new debtor who agrees to the insolvency of the
assume the obligation of the old debtor, new debtor at the
with the consent of the creditor. The old time of delegacion.
debtor’s consent is not required and upon (PINEDA 341-343 (2009))
assumption by the new debtor of the debt,
the old debtor is released from liability. (c) Subrogating 3rd person to rights of creditor
Since the old debtor does not consent, his (active)
liability cannot be revived even if the new i. Conventional – agreement and consent of
debtor becomes insolvent or cannot pay all parties; clearly established (CIVIL CODE,
the obligation. It is however important that arts. 1300-1301)
the creditor and the new debtor agree to ii. Legal – takes place by operation of law; no
release the old debtor, otherwise the “new” need for consent; NOT presumed except
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as provided for in law: (CIVIL CODE, arts. liable for the

1300 & 1302) deficiency
When Subrogation is Presumed (CIVIL CODE, art.

1302)
i. Creditor pays another preferred creditor even Conventional Subrogation Vs. Assignment
w/o debtor’s knowledge CONVENTIONAL ASSIGNMENT OF
SUBROGATION RIGHTS
Example: Governed by Arts. Governed by Arts. 1624
A owes B P20,000 secured by a first mortgage 1300-1304 to 1627
on the land of A. A also owes C P30,000.00, Debtor’s consent is Debtor’s consent is NOT
which is unsecured or secured by a second required required, but must be
mortgage. Under the law, B, who is a preferred notified in order to be
creditor, has preference to payment with bound
respect to the land as against C who is only an Extinguishes the Transmission of right of
ordinary creditor. If C pays the debt of A to B, C obligation and gives the creditor to third
will be subrogated in B’s rights. C can now rise to a new one person without modifying
foreclose the mortgage in case A fails to pay his or extinguishing the
debt to B. (DE LEON 458 (2019)) obligation
Defects and vices in Defects and vices in the
ii. 3rd person not interested in obligation pays w/ the old obligation are old obligation are NOT
approval of debtor cured cured
(PINEDA 354-355 (2009))
Example:
A owes B P10,000. C pays B with the express Novation arising from a purported change in the
or implied consent of A. Here, C will be person of the debtor must be clear and express
subrogated in the rights of B. (DE LEON 458 because it is never presumed. A conversion from a
(2019)) partnership to a corporation, without sufficient
iii. Person interested in fulfillment of obligation evidence that they were expressly released from
pays debt even w/o knowledge of debtor their obligations, does not make a new corporate
personality, a third person or new debtor within the
Example: context of a subjective novation. (Ajax v. Court of
A and B are joint debtors of C for the amount of Appeals, G.R. No. 118585)
P10,000. Without A knowing, B pays the debt of
P10,000. Here, B becomes a creditor of A for
P5,000 only (i.e., A’s share of the debt), not for The obligation to pay a sum of money is not novated
the remaining P5,000 (i.e., B’s share of the by an instrument that expressly recognizes the old,
debt), which is extinguished by confusion or changes only the terms of payment, adds other
merger of rights. (DE LEON 459 (2019)) obligations not incompatible with the old ones, or the
new contract merely supplements the old one.
Payment by 3rd Person v. Change of Debtor (Foundation Specialists Inc. v. Betonval Ready
DIFFERENCE CHANGE OF DEBTOR Concrete, G.R. No. 170674)
FROM PAYMENT
BY 3RD PERSON Novation is not a ground under the law to extinguish
Debtor is NOT Old debtor is released criminal liability. The legal effect of novation is
necessarily limited in its effect only to the civil aspect of the
released from debt liability. The role of novation may only be either to
Creditor is not Needs consent of creditor: prevent the rise of criminal liability, or to cast doubt
bound to accept express or implied on the true nature of the original basic transaction,
payment, unless whether or not it was such that the breach of the
there is stipulation obligation would not give rise to penal responsibility,
to the contrary (CIVIL as when money loaned is made to appear as a
CODE, art. 1236) deposit, or other similar disguise is resorted to.
3rd person can make New debtor is obliged to (Degańos v. People, G.R. No. 162826)
payments less than pay the full remaining
the amount of the amount of the obligation
obligation and
cannot be held
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B. CONTRACTS Period when the parties perform their respective

undertaking under the contract, culminating in the
1. GENERAL PROVISIONS extinguishment thereof (HECTOR S. DE LEON &
HECTOR M. DE LEON, JR., COMMENTS AND
a. Stages of Contracts CASES ON OBLIGATIONS AND CONTRACTS 542
(2014))
(i) PREPARATION/NEGOTIATION
Negotiation begins from the time the prospective
Period from the time the prospective contracting contracting parties manifest their interest in the
parties indicate their interest in the contract to the contract and ends at the moment of agreement of
time the contract is perfected. the parties. The perfection or birth of the contract
takes place when the parties agree upon the
(ii) PERFECTION/BIRTH essential elements of the contract. The last stage is
the consummation of the contract where the parties
fulfill or perform the terms they agreed on,
Consensual contracts
culminating in its extinguishment. (International
As a general rule, contracts are perfected by mere
Freeport Traders, Inc. v. Danzas Intercontinental,
consent of the parties regarding the subject matter Inc., 640 SCRA 621)
and the cause of the contract. (CIVIL CODE, arts.
1315, 1319) They are obligatory in whatever form b. Classifications
they may have been entered into, provided all the
essential requisites for their validity are present. As to perfection or formation
(CIVIL CODE, art. 1356) 1. Consensual – perfected by mere consent of
the parties on the subject matter and cause
(CIVIL CODE, art. 1315) (e.g., contract of sale)
Real contracts
2. Real – perfected by delivery (CIVIL CODE, art.
The exceptions are real contracts, which are
1316) (e.g., commodatum, pledge, deposit)
perfected not merely by consent but by the actual or
3. Formal/Solemn – require a certain specified
constructive delivery of the object of the obligation.
form, in addition to consent, subject matter and
cause (CIVIL CODE, art. 1356) (e.g., donation
of real property)
Example: Depositum, pledge, commodatum
(Hector S. De Leon & Hector M. De Leon, Jr.,
Comments and Cases on Obligations and Contracts As to cause
493 (2019) 1. Onerous – The cause is, for each contracting
party, the prestation or promise of a thing or
service by the other (e.g., contract of sale)
Formal/Solemn contracts
When the law requires that a contract be in some
2. Remuneratory– The cause is some past
form to be valid (CIVIL CODE, art. 1356), this
service or benefit which by itself is a
special form is necessary for its perfection
recoverable debt (CIVIL CODE, art. 1350)
a. Note: In a remuneratory donation, the
Example: Donation of real property, (Art. 749), past service or debt is not by itself a
donation of personal property the value of which recoverable debt. (CIVIL CODE, art.
exceeds P5,000.00 (Art. 748), sale of land through 726)
an agent (Art. 1874), contract of antichresis (Art. 3. Gratuitous (or contracts of pure
2134), stipulation to pay interest (Art. 1956), beneficence) – founded on the mere liberality
of the benefactor (e.g., pure donation) (CIVIL
contract of partnership (Arts. 1771, 1773), transfer
CODE, art. 1350)
or sale of large cattle (Act No. 1147, Sec. 22),
Negotiable instruments (Act No. 2031, Sec. 1). As to importance or dependence of one upon
(Hector S. De Leon & Hector M. De Leon, Jr., another
Comments and Cases on Obligations and Contracts 1. Principal – when the contract does not depend
637 (2019) for its existence and validity upon another
contract (e.g., sale, lease)
2. Accessory – depends on another contract for
(iii) CONSUMMATION
its existence and validity (e.g., mortgage,
guaranty)
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3. Preparatory – the contract is entered into as a contract. It has already been

means through which future contracts may be given a name of its own, i.e.,
made (e.g., agency, partnership) (ERNESTO L. barter or exchange. (CIVIL
PINEDA, OBLIGATIONS AND CONTRACTS
CODE, art. 1638)
36 (2009))
d. Facio ut facias – I do that you may do
As to parties obliged (ERNESTO L. PINEDA,
1. Unilateral – only one of the parties has an OBLIGATIONS AND CONTRACTS
obligation (ERNESTO L. PINEDA, 380 (2009))
OBLIGATIONS AND CONTRACTS 366 (2009))
2. Bilateral – both parties are required to render Auto Contracts
reciprocal prestations (CIVIL CODE, art. 1191) Only one person represents two opposite parties,
but in different capacities. (ERNESTO L. PINEDA,
As to form OBLIGATIONS AND CONTRACTS 367 (2009))
1. Common or informal – require no particular
form (CIVIL CODE, art. 1356) Example: An agent representing his principal sells
2. Special or formal – require some particular a specific car to himself, as a buyer
form (CIVIL CODE, art. 1356)
Collective Contracts
will of the majority binds the minority to an
As to their purpose
agreement notwithstanding the opposition of the
1. Transfer of ownership
latter. (4 ARTURO M. TOLENTINO,
2. Conveyance of use
COMMENTARIES AND JURISPRUDENCE ON
3. Rendition of service (4 ARTURO M.
THE CIVIL CODE OF THE PHILIPPINES 437
TOLENTINO, COMMENTARIES AND
(1991))
JURISPRUDENCE ON THE CIVIL CODE OF
THE PHILIPPINES 410-411 (1991))
Example: Collective bargaining contracts by labor
organizations under R.A. No. 875.
As to their subject matter
1. Things Contracts of Adhesion
2. Services (4 ARTURO M. TOLENTINO, One party imposes a ready-made form of contract
COMMENTARIES AND JURISPRUDENCE which the other party may accept or reject but
ON THE CIVIL CODE OF THE PHILIPPINES cannot modify; one party prepares the stipulation in
410-411 (1991)) the contract, while the other party merely affixes his
signature or his “adhesion” thereto, giving no room
As to the risk involved for negotiation and depriving the latter of the
1. Commutative – when the undertaking of one opportunity to bargain on equal footing (Polotan, Sr.
party is considered the equivalent of that of the v. CA, G.R. No. 119379); construed strictly against
other (e.g., sale, lease) the one who drafted the same (Geraldez v. CA, G.R.
2. Aleatory – when it depends upon an uncertain No. 108253).
event or contingency both as to benefit or loss
(e.g., insurance, sale of hope) (JURADO 361 NOTE: It bears stressing that a contract of
adhesion is just as binding as ordinary contracts. It
(2010))
is true that we have, on occasion, struck down such
contracts as void when the weaker party is imposed
As to the name or designation upon in dealing with the dominant bargaining party
1. Nominate – those which have a specific name and is reduced to the alternative of taking it or
or designation in law (e.g., lease, sale, agency, leaving it, completely deprived of the opportunity to
etc.) bargain on equal footing, Nevertheless, contracts of
2. Innominate – those which have no specific adhesion are not invalid per se; they are not entirely
designation or name in law (CIVIL CODE, art. prohibited. The one who adheres to the contract is
in reality free to reject it entirely; if he adheres, he
1307)
gives his consent. (Rizal Commercial Banking
a. Do ut des – I give that you may give Corporation v. CA, G.R. No. 133107)
b. Do ut facias – I give that you may do
c. Facio ut des – I do that you may give
i. Note: Do ut des is, however,
no longer an innominate
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2. ESSENTIAL REQUISITES 4. Subject matter becomes Illegal or impossible

before acceptance is communicated;
Essential Requisites - The three essential (EDGARDO L. PARAS, CIVIL CODE OF THE
requisites are (1) Consent; (2) Subject Matter; and PHILIPPINES ANNOTATED: PRESCRIPTION;
(3) Consideration. OBLIGATIONS AND CONTRACTS 612 (2016))
5. Lapse of Period given to the offeree within
a. Consent which to signify acceptance; (CIVIL CODE, art.
1324) or
6. Revocation of the offer in due time (i.e. before
Definition - Meeting of the offer and the acceptance
the offeror has learned of its acceptance by the
upon the thing and the cause which are to constitute
offeree) (CIVIL CODE, art. 1324)
the contract; concurrence of a certain offer and an
absolute acceptance (CIVIL CODE, art. 1319)
Period for acceptance
3 1. Stated fixed period in the offer – The offeree
Requisites (C ):
may accept at any time until such period expires
1. Must be manifested by the Concurrence of the
(Young v. Court of Appeals, G.R. No. 83271)
offer and acceptance upon the thing and cause;
2. No stated fixed period
2. Parties are legally Capacitated to enter into
a. Offer is made to a person present –
contracts
Acceptance must be made immediately
3. Consent must be intelligent, free, spontaneous,
(Malbarosa v. Court of Appeals, G.R No.
and real (ERNESTO L. PINEDA,
125761).
OBLIGATIONS AND CONTRACTS 415 (2009))
b. Offer is made to a person absent –
Acceptance may be made within such
Offer time that, under normal circumstances,
A proposal made by one party to another to enter an answer can be received from him.
into a contract; must be certain or definite, complete (ERNESTO L. PINEDA, OBLIGATIONS
and intentional. (CIVIL CODE, art. 1319) AND CONTRACTS 425 (2009))
Acceptance NOTE: For a contract to arise, the acceptance must

Manifestation by the offeree of his assent to the be made known to the offeror. Accordingly, the
terms of the offer; must be absolute (i.e., must not acceptance can be withdrawn or revoked before it is
qualify the terms of the offer) (Oesmer v. Paraiso made known to the offeror. (Oesmer v. Paraiso
Development Corporation, G.R. No. 157493) Development Corporation, G.R. No. 157493)
NOTE: A qualified acceptance constitutes counter- NOTE: We follow the theory of cognition (CIVIL
offer. (CIVIL CODE, art. 1319) CODE, art. 1319) and not the theory of
manifestation. Under our Civil Law, the offer and
Elements of a valid offer acceptance concur only when the offeror comes to
1. Definite know of, and not when the offeree merely manifests
2. Complete his acceptance.
3. Intentional (Palattao v. CA, G.R. No. 131726,)
Rule on complex offers
Elements of a valid acceptance 1. Offers are interrelated – Contract is perfected
1. Unequivocal if all the offers are accepted.
2. Unconditional (Palattao v. CA, G.R. No. 2. Offers are not interrelated – Single
131726) acceptance of each offer results in a perfected
contract unless the offeror has made it clear that
When offer becomes ineffective (QR-DRIP) one is dependent upon the other and
1. Death, civil interdiction, insanity or insolvency of acceptance of both is necessary. (CIVIL CODE,
either party before acceptance is conveyed art. 1319)
(CIVIL CODE, art. 1323); 3. Offer interpraesentes must be accepted
2. Express or implied Rejection of the offer by the immediately. If the parties intended that there
offeree; (NHA v. Grace Baptist Church, G.R. should be an express acceptance, the contract
No. 156437) will be perfected only upon knowledge by the
3. Qualified or conditional acceptance of the offer, offeror of the express acceptance by the offeree
which becomes a counter-offer; (CIVIL CODE, of the offer. An acceptance which is not made
art. 1319) in the manner prescribe by the offeror is not
effective, but a counter-offer which the offeror
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may accept or reject. (Malbarosa v. Court of agrees with another person that he shall have the
Appeals, G.R No. 125761) right to buy his property at a fixed price within a
certain time. An option is not of itself a purchase, but
Rule on advertisements as offers merely secures the privilege to buy. It is not a sale
1. Business advertisements – Not a definite of property but a sale of the right to purchase.
offer, but mere invitation to make an offer, (Adelfa Properties, Inc. v. CA, G.R. No. 111238)
unless it appears otherwise (CIVIL CODE, art.
1325) Effects of option:
2. Advertisements for bidders – They are simply 1. Not supported by an independent consideration
invitations to make proposals and the advertiser (i.e., distinct from the purchase price) – offeror
is not bound to accept the highest or lowest can withdraw the offer at any time before
bidder, unless the contrary appears (CIVIL acceptance by communicating such withdrawal
CODE, art. 1326) 2. Supported by independent consideration –
offeror cannot withdraw his offer (CIVIL CODE,
Article 1326 of the Civil Code, which specifically art. 1324)
tackles offer and acceptance of bids, provides that
advertisements for bidders are simply invitations to Persons incapacitated to give consent (DD-MI):
make proposals, and that an advertiser is not bound 1. Minors (CIVIL CODE, art. 1327).
to accept the highest bidder unless the contrary 2. Insane or demented persons (CIVIL CODE, art.
appears. (PMO v. STRADEC, G.R. No. 200402) 1327), unless the contract was entered into
during a lucid interval (CIVIL CODE, art. 1328)
Four (4) theories on acceptance of offer by 3. Deaf-mutes who do not know how to write
telegram or letter (CIVIL CODE, art. 1327).
1. Manifestation – perfected from the moment the 4. In a state of Drunkenness or under a hypnotic
acceptance is declared or made. spell (CIVIL CODE, art. 1328)
2. Expedition – perfected from the moment the
offeree transmits the notification of acceptance. BUT NOTE: The following are other instances
3. Reception – perfected from the moment the that incapacitates a person from giving consent:
offeror receives the letter. 1. Civil interdiction shall deprive the
4. Cognition – perfected from the moment the offender during the time of his sentence of
acceptance comes to the knowledge of the
the rights of parental authority, or
offeror. (JURADO 402 (2010))
guardianship, either as to the person or
NOTE: Contracts under the Civil Code generally property of any ward, of marital authority, of
adhere to the Cognition Theory while transactions the right to manage his property and of the
under the Code of Commerce adhere to the right to dispose of such property by any act
Manifestation Theory. (JURADO 402 (2010)) or any conveyance inter vivos. (REVISED
PENAL CODE, art. 38)
When the offeror refuses to open the letter or
2. Prodigality, in order to render a person
telegram he is held to have a constructive notice of
the contents thereof and will be bound by the legally unfit to administer his own affairs his
acceptance of the offeree. (JURADO 403-404 acts of prodigality must show a morbid mind
(2010)) and a disposition to spend or waste the
estate so as to expose his family to want or
Options to deprive his forced heirs of their
General rule: If the offeror has allowed the offeree inheritances. (Martinez v. Martinez, G.R.
a certain period to accept, the offer may be
No. 445)
withdrawn at any time before acceptance by
communicating such withdrawal. (CIVIL CODE, art.
1324) BUT NOTE: Minority, insanity or imbecility, the
state of being a deaf-mute, prodigality and civil
Exception: When the option is founded upon a interdiction are mere restrictions on capacity to
consideration as something paid or promised. act, and do not exempt the incapacitated person
(CIVIL CODE, art. 1324) from certain obligations, as when the latter arise
from his acts or from property relations, such as
An option, sometimes called an “unaccepted offer,” easements. (CIVIL COD, art. 38)
is simply a contract by which the owner of property
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Contracts entered into by the persons above are in

generally valid until annulled; however, annulment INCAPACITY DISQUALIFICATION
cannot prosper when they have been ratified. (CIVIL Restrains the exercise Restrains the very right
CODE, art. 1390). of the right to contract itself
May still enter into Absolutely disqualified
Rule on contracts entered into by minors contract through
General rule: Voidable (CIVIL CODE, art. 1391) parent, guardian or
Exceptions (MENGS) (These contracts are valid): legal representative
1. If upon reaching age of Majority, they ratify the Based upon subjective Based upon public
same. (Ibanez v. Rodriguez, G.R. No. 23153) circumstance of certain policy and morality
2. They were entered unto by a Guardian and the person
court having jurisdiction had approved the Contracts entered into Contracts entered into
same. (Roa v. Roa, G.R. No. 28532) are merely voidable are void
3. They were in the form of Savings account in the (ERNESTO L. PINEDA, OBLIGATIONS AND
Postal Savings Bank, provided furthermore that CONTRACTS 440 (2009))
the minor was at least 7 years old. (Rev. Adm.
Code, Sec. 2007) Causes which vitiate consent
4. They were contracts for Necessaries such as A contract where consent is given through Mistake,
food, but here the persons who are bound to Violence, Intimidation, Undue Influence, or Fraud is
give them support should pay therefor (CIVIL voidable (VIMFU). (CIVIL CODE, art. 1330)
CODE, arts. 1489 & 2164; FAMILY CODE, E.O.
209, art. 194 (1987)) i. Mistake
5. Contracts where the minor misrepresented his Must include both ignorance, which is the absence
age and pretended to be one of major age and of knowledge with respect to a thing, and mistake
is thus in Estoppel. (Hermosa v. Zobel, G.R. No. properly speaking, which is a wrong conception
L-11835). It is, however, essential here that the about said thing, or a belief in the existence of some
other party must have been MISLED circumstance, fact, or event, which in reality does
(Bambalan v. Maramba, G.R. No. L-27710). not exist. (Theis v. Court of Appeals, G.R. No.
HOWEVER, minors can set up the defense of 126013)
minority to resist the claim when there is only
passive misrepresentation, as when they did Requisites (FES):
not disclose their minority because they had no a. The error must be Substantial regarding:
juridical duty to disclose their inability. i. The object of the contract, or
(Braganza v. De Villa Abrille, G.R. No. L-12471) ii. The conditions which principally
moved or induced one of the parties
NOTE: If both parties to a contract are minors, the (error in quality or in quantity), or
contract is unenforceable. (CIVIL CODE, art. iii. Identity of qualifications, but only if
1403(3)). such was the principal cause of the
contract (CIVIL CODE, art. 1331)
Examples of persons specially disqualified to b. The error must be Excusable (not caused by
enter into contracts (Contracts entered into are negligence). There is no mistake if the party
VOID): alleging it knew the doubt, contingency or
1. Husband and wife selling to one another (CIVIL risk affecting the object of the contract.
CODE, art. 1490) or donating to one another (CIVIL CODE, art. 1333)
(CIVIL CODE, art. 134) c. The error must be mistake of Fact, and not
2. Insolvents before they are discharged cannot, of law. (Luna v. Linatoc, G.R. No. L-48403,
for example, make payments. Exception: Oct. 28, 1942)
Payment of administrative expenses shall be
allowed. (An Act Providing For The Two (2) General Kinds of Mistake
Rehabilitation Or Liquidation Of Financially a. Mistake of Fact – When one or both of the
Distressed Enterprises And Individuals contracting parties believe that a fact exists
[Financial Rehabilitation and Insolvency Act of when in reality it does not, or that such fact
2010], Republic Act No. 10142, § 57 (2010)) does not exist when in reality it does
3. Persons disqualified because of fiduciary (ERNESTO L. PINEDA, OBLIGATIONS
relationship (CIVIL CODE, art. 1491) AND CONTRACTS 443 (2009))
b. Mistake of Law
• General Rule: Mistake does not vitiate
consent (CIVIL CODE, art. 1331)
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• Reason: Ignorance of the law does not judgment. Contracts are also valid even though they
excuse anyone from compliance are entered into by one of the parties without hope
therewith (CIVIL CODE, art. 3) of advantage or profit. (Martinez v. Hongkong and
• Exception: Mutual error as to the legal Shanghai Bank, G.R. No. L-5496)
effect of an agreement when the real
purpose of the parties is frustrated (CIVIL Note: Violence or intimidation shall annul the
CODE, art. 1334). obligation, although it may have been employed by
i. “Legal effect” here refers to the a third person who did not take part in the contract.
rights of the parties as stated in the (CIVIL CODE, art. 1336)
legal provisions.
iv. Undue Influence
ii. Violence
Requisites (DIP):
Requisites (PFR): a. Improper advantage
a. Serious or irresistible Physical Force b. Power over the will of another
b. Such force is the Reason why the c. Deprivation of the latter of a reasonable
contract was entered into. (CIVIL freedom of choice. (CIVIL CODE, art. 1337)
CODE, art. 1335)
Circumstances to be considered (FIRM)
Note: Violence refers to physical coercion, while a. Confidential, family, spiritual, and other
intimidation refers to moral coercion. (EDGARDO L. Relations between the parties
PARAS, CIVIL CODE OF THE PHILIPPINES b. Mental weakness
ANNOTATED: PRESCRIPTION; OBLIGATIONS c. Ignorance
AND CONTRACTS 632 (2016)) d. Financial distress (CIVIL CODE, art. 1337).
iii. Intimidation v. Fraud
Requisites (FReT): Fraud in Obtaining Consent

a. Reasonable and well-grounded Fear of an In order that fraud may vitiate consent, it must be the
imminent and grave evil upon his person, causal (dolo causante), not merely the incidental
property, or upon the person or property of (dolo incidente), inducement to the making of the
his spouse, descendants, or ascendants contract. (Ponce de Leon v. Rehabilitation Finance
b. It is the Reason why the contract was Corporation, G.R. No. L-24571)
entered into
c. The Threat must be of an unjust act, an a. Causal Fraud (Dolo Causante)
actionable wrong (A threat to enforce a just This is the use of insidious words or machinations
or legal claim through competent authority by one of the contracting parties to induce the other
does not vitiate consent.) (CIVIL CODE, art. party to enter into a contract, which, without them,
1335) he would not have agreed to. (CIVIL CODE, art.
1338)
Example: What the respondent did was merely
inform them of petitioner Edna’s conviction in the Determines or is the essential cause of consent.
criminal cases for estafa. It might have evoked a
sense of fear or dread on the petitioners’ part, but It is the deception employed by one party prior to or
certainly there is nothing unjust, unlawful or evil simultaneous to the contract in order to secure the
in the respondent's act. ... The petitioners must consent of the other (Metropolitan Fabrics, Inc. v.
remember that petitioner Edna's conviction was a Prosperity Credit Resources, Inc., G.R. No. 154390)
result of a valid judicial process and even without the
respondent allegedly “ramming it into petitioner Effects: Voidability of the contract and the
Victor's throat,” petitioner Edna's imprisonment indemnification for damages (Geraldez v. CA, G.R.
would be a legal consequence of such conviction. No. 108253)
(Spouses Binua v. Ong, G.R. No. 207176)
Requisites (PS-SOBIA)
Reluctant Consent – It is necessary to distinguish a. There must be misrepresentation or
between real duress and the motive which is present concealment (CIVIL CODE, arts. 1338 &
when one gives his consent reluctantly. A contract 1339) by a party Prior to or Simultaneous to
is valid even though one of the parties entered into the consent or creation of the contract.
it against his wishes or even against his better b. Must be Serious. (CIVIL CODE, art. 1344)
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c. Must have been employed by only One of the conventional exaggeration and later the
contracting parties. (CIVIL CODE, art.1342) realm of bad faith, then deceit (either
causante or incidental) may set in.
BUT NOTE: Misrepresentation by a third (BALANE 635-36 (2020))
person does not vitiate consent, unless such
misrepresentation has created substantial The rule of caveat emptor requires the
mistake and the same is mutual, or when the purchaser to be aware of the supposed title
third person makes the misrepresentation with of the vendor and one who buys without
the complicity or, at least, with the knowledge, checking the vendor’s title takes all the risks
but without objection, of the contracting party and losses consequent to such failure.
who is favored. (JURADO 449 (2010)) (Caram, Jr. v. Laureta, G.R. No. L-28740)
d. Must be made in Bad faith or with intent to However, this rule only requires the
deceive. (CIVIL CODE, art. 1343) purchaser to exercise such care and
e. Must have Induced the consent of the other attention as is usually exercised by
contracting party. (CIVIL CODE, art. 1338) ordinarily prudent men in like business
f. Must be Alleged and proved by clear and affairs, and only applies to defects which
convincing evidence, and not merely by a are open and patent to the service of one
preponderance thereof. (Tan Sua Sia v. exercising such care. Moreover, it can also
Sontua, 56 Phil. 711, 1932) only be applied where it is shown that the
parties to the contract stand on equal
b. Incidental Fraud (Dolo Incidente) footing and have equal knowledge or equal
Deceptions or misrepresentations which are not means of knowledge and there is no
serious and without which the other party would still relation of trust or confidence between
have entered into the contract. them. In such a case, if a seller’s
representations prove to be false, neither
It is not the cause which induced the party to enter law nor equity will permit the seller to
into a contract and refers only to some particular or escape responsibility by the plea that the
accident of the obligations. (Geraldez v. CA, G.R. buyer ought not to have believed him or
No. 108253) ought to have applied to other sources to
ascertain the facts. (Guinhawa v. People,
Effect: Only renders the person employing it liable G.R. No. 162822)
for damages. (CIVIL CODE, art. 1344)
b. Subject Matter (SM)
Simulated Contracts
(a) Absolute – the parties have no intention to Requisites of things as SM (W-PLDT):
be bound at all (CIVIL CODE, art. 1345); 1. Within the commerce of man (CIVIL CODE, art.
void from beginning (CIVIL CODE, art. 1347) – either existing or in potency
1346). 2. Licit or not contrary to law, morals, good
customs, public order or public policy (CIVIL
(b) Relative – the parties conceal their true CODE, art. 1347)
agreement (CIVIL CODE, art. 1345): the 3. Possible, legally or physically (CIVIL CODE, art.
real agreement binds the parties when: 1348).
a. There is no prejudice to 3rd 4. Determinate as to its kind or determinable
persons; and without need to enter into a new contract (CIVIL
b. It is not contrary to law, moral, CODE, art. 1349)
good customs, public order or 5. Transmissible (CIVIL CODE, art. 1347)
public policy (CIVIL CODE, art.
1346) Requisites of services as SM (PWD):
1. Within the commerce of man (CIVIL CODE, art.
(c) Dealer’s Talk (Dolo bonus) - This 1347)
oxymoron (literally, good fraud) refers 2. Possible, physically or legally (CIVIL CODE, art.
to dealer’s talk, the kind of 1348)
exaggerations in advertisement the 3. Determinate or capable of being made
public is familiar with. The ancient determinate (CIVIL CODE, arts. 1318[2] &
principle still governs in this regard: Caveat 1349)
emptor -- Buyer beware. But once the
dealer’s talk goes beyond innocent
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Things which cannot be the subject matter of a Remains the same May vary although a
contract (I-COFID): regardless of a party’s party enters into the
1. Things which are Outside the commerce of men motive for entering into same kind of contract
(CIVIL CODE, art. 1347) a contract
2. Intransmissible rights (CIVIL CODE, art. 1347) Legality or illegality of Legality or illegality of
3. Future inheritance, except in cases expressly cause affects the motive does not affect
authorized by law (CIVIL CODE, art. 1347) existence or validity of the existence or validity
4. Services Contrary to law, morals, good the contract of contract
customs, public order or public policy (CIVIL
CODE, art. 1347) (HECTOR S. DE LEON & HECTOR M. DE LEON,
5. Impossible things or services (CIVIL CODE, art. JR., COMMENTS AND CASES ON OBLIGATIONS
1348). AND CONTRACTS 673-674 (2014))
6. Objects which are not possible of Determination
as to their kind (CIVIL CODE, art. 1349) Causes in some contracts:
1. Onerous contracts – The prestation of
NOTE: Contracts upon future inheritance are void promise of a thing or service by the other.
when: (CIVIL CODE, art. 1350)
• The succession has not yet been opened; 2. Remuneratory contracts – The service or
• The object of the contract forms part of the benefit remunerated. (CIVIL CODE, art. 1350)
inheritance; and 3. Contracts of Pure Beneficence – Mere
• The promissor has, with respect to the object, liberality of the donor or benefactor. (CIVIL
an expectancy of a right, which is purely CODE, art. 1350)
hereditary in nature. (De Belen Vda. De Cabalu 4. Accessory Contracts Like Mortgage and
v. Tabu, G.R. No. 188417) Pledge – The cause is generally the same as
the cause for the principal contract of loan.
c. Cause or Consideration (China Bank v. Lichauco, G.R. No. L-22001)
5. Accessory Contracts of Personal Guaranty
– Generally pure liberality but sometimes
Definition - Refers to the immediate, direct and
material consideration may be given. (Standard
most proximate reason which justifies the creation
Oil Co. v. Arenas, G.R. No. L-5921)
of an obligation through the will of the contracting
parties and is the essential reason for the contract.
(Uy v. CA, G.R. No. 120465) EFFECT IN CAUSE EFFECT
Absence of causa – Void – Contract
Total lack or absence produces no legal
Requisites (LET)
of cause effect (CIVIL CODE,
1. It must Exist at the time the contract is entered
art. 1352)
into. (CIVIL CODE, art. 1352 & 1409[3])
2. It must be True. (CIVIL CODE, art 1353)
Illegality of causa – Void – Contract
3. It must be Licit. (CIVIL CODE, art. 1352)
The cause is contrary produces no legal
to law, morals, good effect (CIVIL CODE,
Motive – refers to the particular reason of one party customs, public order art. 1352)
for entering into the contract which does not affect and public policy
the other party nor the validity of the contract;
Falsity of causa – A Void IF it should not be
however, when the motive predetermines the cause
cause is stated but it is proved that the
or when the realization of such motive has been
not true contract was founded
made a condition upon which the contract is made
upon another cause
to depend, the motive may be regarded as the
which is true and lawful
cause (Uy v. CA, G.R. No. 120465).
(CIVIL CODE, art.
1353)
Cause distinguished from Motive
CAUSE MOTIVE Causa not stated in Presumed to Exist –
Immediate or direct Remote or indirect the contract Burden of proof is on
reason of a contract reason the person assailing its
Objective and juridical Psychological or purely existence (CIVIL
reason of contract; personal reason; may CODE, art. 1354)
always known to both be unknown to the
parties other party
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Inadequacy of causa or General Rule: Does Moral Obligation as Cause

lesion (CIVIL CODE, not invalidate contract Where the moral obligation arises wholly from
art. 1355) ethical considerations, unconnected with any civil
Exceptions: obligations, it cannot constitute a sufficient cause or
1. When, together consideration to support an onerous contract.
with lesion, there (Fisher v. Robb, G.R. No. 46274)
has been: fraud,
mistake or undue Where such moral obligation is based upon a
influence previous civil obligation which has already been
2. In cases specified barred by the statute of limitations at the time when
by law (the ff. the contract is entered into, it constitutes a sufficient
contracts may be cause or consideration to support a contract.
rescinded) (Villaroel v. Estrada, G.R. No. L-47362)
• Those entered
into by 3. REFORMATION OF INSTRUMENTS
guardians
when the As distinguished from annulment where there is no
wards suffer meeting of the minds, in reformation, there is
lesion by more meeting of the minds but attended by mistake,
than ¼ of the fraud, inequitable conduct, or accident. (CIVIL
value of the CODE, art. 1359)
things which
are the object Requisites for action for reformation (VP-PIM)
thereof (CIVIL 1. Meeting of the minds (CIVIL CODE, art. 1359)
CODE, art. 2. True Intention is not expressed (CIVIL CODE, art.
1381, par. 1) 1359)
• Those agreed 3. Clear and convincing Proof (HECTOR S. DE LEON
upon in & HECTOR M. DE LEON, JR., COMMENTS AND
representation CASES ON OBLIGATIONS AND CONTRACTS 713
of absentee, if (2014))
the latter 4. Within proper prescriptive Period
suffer lesion 5. Not simple unconditional donation inter vivos or
stated in par. 1 contract where real agreement is Void (CIVIL
(CIVIL CODE, CODE, art. 1366)
art. 1381, par.
2) NOTE: In reformation, no new contract is made.
• Partition
among co- Contracts that may be reformed: (CM-TIFF)
heirs, when 1. Mutual mistake fails to disclose the real
any one of agreement (but it must be a mistake of Fact)
them received (CIVIL CODE, art. 1361)
things with a 2. Unilateral mistake or the other party acted
value less by Fraudulently (CIVIL CODE, art. 1362)
at least ¼ than 3. Unilateral mistake and the other party is guilty
the share to of Concealment (CIVIL CODE, art. 1363)
which he is 4. Person drafting the instrument or clerk or typist
entitled (CIVIL through ignorance, lack of skill, negligence or
CODE, art. bad faith, does not show the True Intention
1098) (CIVIL CODE, art. 1364)
5. Parties agree on Mortgage, pledge of real or
personal property but instrument says that it is
Failure of Cause sold absolutely or involves a right to repurchase
when the seller fails to realize the price or does (CIVIL CODE, art. 1365)
not deliver the thing to the buyer. The injured
No reformation is allowed in: (SD-WV)
party is entitled to specific performance or
1. Simple Donation
rescission.
2. Wills
3. Real agreement is Void (CIVIL CODE, art. 1366)
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When there are several provisions in a contract, the

Who may ask for reformation: (NOT-FE-MM) construction to be adopted should be that one which
1. The party who is NOT at Fault (i.e., injured will give effect to all provisions. A contract must be
party, heirs or assigns) (CIVIL CODE, art. 1367) read in its entirety. (Rigor v. Consolidated Orix
2. Party who is NOT asked to Enforce the Leasing Finance Corporation, G.R. No. 136423)
instrument (CIVIL CODE, art. 1368)
3. If there is a Mutual Mistake, reformation may be The ambiguity in a contract should be construed
had by either party or successor in interest against the party who caused the same. (CIVIL
(CIVIL CODE, art. 1368) CODE, art. 1377)
Procedure for reformation shall be governed by the 5. RESCISSIBLE CONTRACTS

Rules of Court as promulgated by the Supreme
Court. (CIVIL CODE, art. 1369) Definition
Those which have caused economic damage either
The prescriptive period for actions based upon a to one of the parties or to a third person and which
written contract and for reformation of an instrument may be set aside even if valid. They may be set
is ten (10) years under Article 1144 of the Civil Code. aside in whole or in part, to the extent of the damage
(Yolanda Rosello-Bentir v. Honorable Mateo M. caused. (4 ARTURO M. TOLENTINO, COMMENTARIES
Leanda, G.R. No. 128991) AND JURISPRUDENCE ON THE CIVIL CODE OF THE
PHILIPPINES 574 (1991))
4. INTERPRETATION OF CONTRACTS
Rescissible Contracts under Art. 1381: (ALL-
If the terms of the agreement are clear and GF)
unequivocal, their plain and literal meanings should 1. Entered into by Guardian whenever ward
be followed. (CIVIL CODE, art. 1370) suffers damage by more than 1/4 of value of
object;
In the construction or interpretation of an instrument, 2. Agreed upon in representation of Absentees, if
the intention of the parties is primordial and is to be absentee suffers lesion by more than ¼ of value
pursued. (Valdez v. CA, G.R. No. 140715) of property;
3. Contracts where rescission is based on Fraud
In order to judge the intention of the contracting committed on creditors (accion pauliana);
parties, their contemporaneous and subsequent 4. Objects of Litigation; contract entered into by
acts shall be principally considered. (CIVIL CODE, art. defendant without knowledge or approval of
1371) litigants or judicial authority; and
In case of doubt concerning the surrounding Contracts involving things under litigation are
circumstances in the execution of a contract, the rescissible. Art. 1381 (4) requires the
least transmission of rights and interest shall prevail concurrence of the following: (1) the defendant,
if the contract is gratuitous, and if onerous, the doubt during the pendency of the case, enters into a
is to be settled in favor of greatest reciprocity. (CIVIL contract which refers to the subject of litigation;
CODE, art. 1378) and (2) said contract was entered into without
the knowledge and approval of the litigants or of
The terms of an agreement or writing are presumed a competent judicial authority. The court then
to be have been used in their primary and general has the duty to order the rescission of the
acceptation. However, evidence may be admitted to contract upon the concurrence of such
show that they have a local, technical, or otherwise requisites. (Ada v. Baylon, G.R. No. 182435)
peculiar signification and were used and understood
in that particular instance, in which case, the 5. Provided for by Law – e.g. Arts. 1526, 1534,
agreement or writing must be construed 1539, 1542, 1556, 1560, 1567 and 1659
accordingly. (REVISED RULES ON EVIDENCE, rule 130,
§ 15)
• Art. 1526 – Unpaid seller of goods,
Only laws existing at the time of the execution of a notwithstanding that the ownership in the
contract are applicable to it and not the later statutes goods may have passed to the buyer,
unless the latter are specifically intended to have subject to other provisions on Sales
retroactive effect. (Vive Eagle Land, Inc. v. CA, G.R. • Art. 1534 – Unpaid seller having the right
No. 150308) of lien or having stopped the goods in
transit, where he expressly reserved his
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right to do so in case the buyer should e. The third person who received the property
make default, or the buyer has been in conveyed, if it is by onerous title, has been
default in the payment of the price for an an Accomplice in the fraud. (Anchor Savings
unreasonable time Bank v. Furigay, G.R. No. 191178, Mar. 13,
• Art. 1539 – In the sale of real estate at a 2013; Lee v. Bangkok Bank Public
rate of a certain price for a unit of Company, Limited, G.R. No. 173349, Feb. 9,
measure or number, at the will of the 2011)
vendee, when the inferior value of the
thing sold exceeds one-tenth of the price Under Art. 1382, payments made in a state of
agreed upon, or if the vendee would not insolvency for obligations to whose fulfillment the
have bought the immovable had he debtor could not be compelled at the time they were
effected are also rescissible.
known of its smaller area or inferior
quality
• Art. 1542 – In the sale of real estate, Requisites:
made for a lump sum, where the a. The debtor-payer must have been
boundaries are mentioned and the area insolvent (the insolvency need not be a
or number within the boundaries exceed judicially declared one).
that specified in the contract, when the b. The debt was not yet due and
vendee does not accede to the failure to demandable (CIVIL CODE, art. 1382)
deliver what has been stipulated
• Art. 1556 – Should the vendee lose, by Obligation created by the rescission of the
reason of eviction, a part of the thing sold contract
of such importance, in relation to the
whole, that he would not have bought it Mutual Restitution
without said part a. Things which are the objects of the contract
• Art. 1560 – Vendee may ask for and their fruits
recession if the immovable sold should b. Price with interest (CIVIL CODE, art. 1385)
be encumbered with any non-apparent
NOTE: The obligation of restitution obviously does
burden or servitude, not mentioned in the
not apply to creditors who seek to impugn fraudulent
agreement, of such a nature that it must transactions of their debtors. The obligation of
be presumed that the vendee would not mutual restitution applies to OTHERS so that that
have acquired it had he been aware status quo may be restored. (EDGARDO L. PARAS,
thereof CIVIL CODE OF THE PHILIPPINES ANNOTATED:
• Art. 1567 – In cases of breach of PRESCRIPTION; OBLIGATIONS AND CONTRACTS (2016))
warranty against hidden defects of or
encumbrances upon the thing sold Requisites: (4-TRR)
• Art. 1659 – If the lessor or lessee should a. Plaintiff must be able to Return what has
not comply with their obligations, the been received by virtue of the rescissible
aggrieved party may ask for rescission contract (CIVIL CODE, art. 1385)
b. Object of the contract is not in the legal
Accion pauliana refers to the action to rescind
possession of Third persons in good faith.
contracts in fraud of creditors under Art. 1381.
Requisites: (NR-CAFS) c. Plaintiff has no other legal Remedy. (CIVIL
CODE, art. 1383)
a. The plaintiff asking for rescission has a
d. Action must be brought within the proper
Credit prior to the alienation, although
prescriptive period of 4 years. (CIVIL CODE,
demandable later;
art. 1389)
b. The debtor has made a Subsequent contract
conveying a patrimonial benefit to a third Badges of fraud are circumstances indicating that
person; certain alienation has been made in fraud of
c. The creditor has No other legal Remedy to creditors. Some examples are:
satisfy his claim; a. Consideration of the conveyance is
d. The act being impugned is Fraudulent; inadequate or fictitious;
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b. Transfer was made by a debtor after a suit 2. By Insane unless he/she acted during a lucid
has been begun and while it is pending interval (CIVIL CODE, art. 1327 & 1328)
against him; 3. By Deaf mute who can’t read or write (CIVIL
c. Sale upon credit by an insolvent debtor; CODE, art. 1327)
d. Evidence of indebtedness or complete 4. By Persons specially Disqualified: civil
interdiction (CIVIL CODE, art. 1329 & 38)
insolvency;
5. In state of Drunkenness (CIVIL CODE, art. 1328)
e. Transfer of all his property by a debtor 6. In state of hypnotic Spell (CIVIL CODE, art. 1328)
when he is financially embarrassed or
insolvent; Mistake
f. Transfer made between father and son False belief of something which is contrary to the
where this fact is considered together with real intention of the parties (ERNESTO L. PINEDA,
the preceding circumstances; and OBLIGATIONS AND CONTRACTS 443 (2009))
g. Failure of the vendee to take exclusive
possession of the property (Caltex Requisites: (CP-SEN)
Philippines, Inc. v. PNOC Shipping and 1. Refers to the Subject of the thing which is the
Transport Corporation, G.R. No. 150711) object of the contract
2. Refers to the Nature of the contract
3. Refers to the principal Conditions in an
The presumption of fraud in case of alienations by
agreement (ERNESTO L. PINEDA, OBLIGATIONS
onerous title of a person against whom a judgment
AND CONTRACTS 443 (2009))
has been rendered or attachment issued does not
4. Error as to Person – When it is the principal
apply to registered lands if the judgment or
consideration of the contract
attachment made is not also registered. (Lee v.
5. Error as to legal Effect – When mistake is
Bangkok Bank, G.R. No. 173349)
mutual and frustrates the real purpose of parties
The action to claim rescission must be commenced
within four years. For persons under guardianship Violence
and for absentees, the period of four years shall not Serious or irresistible force is employed to wrest
begin until the termination of the former's incapacity, consent (CIVIL CODE, art. 1335)
or until the domicile of the latter is known (CIVIL
CODE, art. 1389) Intimidation
One party is compelled by a reasonable and well-
grounded fear of an imminent and grave danger
6. VOIDABLE CONTRACTS upon person and property of himself, spouse,
ascendants or descendants (moral coercion) (CIVIL
Definition CODE, art. 1335)
Intrinsic defect; valid until annulled; defect is due to
vice of consent or legal incapacity (ERNESTO L. Undue Influence
PINEDA, OBLIGATIONS AND CONTRACTS 601-602 Person takes improper advantage of his power over
(2009)) will of another depriving latter of reasonable
freedom of choice (CIVIL CODE, art. 1337)
Characteristics (ACED)
1. Effective until set aside The doctrine on reluctant consent provides that a
2. May be assailed or attacked only in an Action contract is still valid even if one of the parties
for that purpose entered it against his wishes or even against his
3. Can be Confirmed better judgment. Contracts are also valid even
though they are entered into by one of the parties
NOTE: Confirmation is the proper term for without hope of advantage or profit. (Martinez v.
curing the defect of a voidable contract. HSBC, G.R. No. L-5496)
4. Can be assailed only by the party whose Fraud

consent was Defective or his heirs or assigns Thru insidious words or machinations of one of the
contracting parties, the other is induced to enter into
What contracts are voidable: a contract without which he will not enter it (dolo
Contracts entered into: (SIM-D3) causante). (Samson v. CA, G.R. No. 108245)
1. By Minors (CIVIL CODE, art. 1327)
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Kinds of Fraud in the Performance of location, can be construed as an implied ratification

Obligations or Contracts thereof.
1. Causal Fraud (dolo causante)
2. Incidental Fraud (dolo incidente) Implied ratification may take diverse forms, such as
3. Tolerated Fraud – includes minimizing the by silence or acquiescence; by acts showing
defects of the thing, exaggeration of its good approval or adoption of the contract; or by
qualities and giving it qualities it does not have; acceptance and retention of benefits flowing
lawful misrepresentation (CIVIL CODE, art. therefrom. (ECE Realty v. Mandap, G.R. No.
1340) 196182, Sept. 1, 2014)
NOTE: Ratification cleanses the contract of its defects from

Expression of an opinion – not fraud unless made the moment it was constituted. (CIVIL CODE, art.
by expert and other party relied on the former’s 1396)
special knowledge (CIVIL CODE, art. 1341)
3. Loss of the Thing which is the object of the
Fraud by third person – does not vitiate consent; contract through fraud or fault of the person who
only action for damages except if there is collusion is entitled to annul the contract. (CIVIL CODE, art.
between one party and the third person, or resulted 1401)
to substantial mistake, mutual between parties.
NOTE: If the object is lost through a fortuitous
Causes of Extinction of the Action to Annul event, the contract can still be annulled, but the
1. Prescription - Period to bring an action for person obliged to return the same can be held liable
only for the value of the thing at the time of the loss,
Annulment
but without interest thereon. (4 ARTURO M.
(a) Intimidation, violence, undue influence TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON
– 4 years from time defect of consent THE CIVIL CODE OF THE PHILIPPINES 614 (1991))
ceases
(b) Mistake, fraud – 4 years from time of
discovery 7. UNENFORCEABLE CONTRACTS
(c) Incapacity - From time guardianship
ceases (CIVIL CODE, art. 1391) Definition
They are valid but the execution cannot be
Discovery of fraud must be reckoned to have taken compelled unless ratified; extrinsic defect; produce
place from the time the document was registered in legal effects only after ratified.
the office of the register of deeds. Registration
constitutes constructive notice to the whole world Kinds: (URA)
(Carantes v. CA, G.R. No. L-33360). 1. Unauthorized or no sufficient authority –
Entered into in the name of another when: (CIVIL
2. Ratification CODE, art. 1404)
a. No authority conferred (CIVIL
Requisites: (Wack) CODE, art. 1317)
1. Knowledge of reason rendering contract b. In excess of authority conferred
voidable (CIVIL CODE, art. 1393) (ultra vires) (CIVIL CODE, art. 1317)
2. Such reason must have Ceased (CIVIL CODE, 2. Curable by Ratification – Both parties incapable
art. 1393). Except in case of ratification effected of giving consent (2 minor or 2 insane persons)
by the guardian to contracts entered into by an (CIVIL CODE, art. 1407)
incapacitated (CIVIL CODE, art. 1394) 3. Curable by Acknowledgment – Failure to
3. The injured party must have executed an act comply with Statute of Frauds. (CIVIL CODE, art.
which expressly or impliedly conveys an 1405)
intention to Waive his right (CIVIL CODE, art.
1393) Statute of Frauds
1. Agreement to be performed within a year after
Even assuming that petitioner’s misrepresentation making contract
consists of fraud which could be a ground for 2. Special promise to answer for debt, default or
annulling their Contract to Sell, respondent’s act of miscarriage of another
affixing her signature to the said Contract, after 3. Agreement made in consideration of promise to
having acquired knowledge of the property's actual marry
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4. Agreement for sale of goods, chattels or things 2. There is no action for annulment necessary as
in action at price not less than 500; exception: such is ipso jure. A judicial declaration to that
auction when recorded sale in sales book effect is merely a declaration;
5. Agreement for lease of property for more than 3. It cannot be confirmed, ratified or cured;
one year and sale of real property regardless of
price NOTE: Assuming that the nullified ... resolutions
6. Representation as to credit of another (CIVIL may be deemed as contracts, we declared in our
CODE, art. 1403 (2)) [previous ruling] that the infirmity in the nullified ...
resolutions did not stem from the absence of
Two Ways of Curing Unenforceable Contracts consent or authority, which would have made them
1. Failure of defendant to object in time, to the unenforceable contracts under Article 1401 (1) of
presentation of parole evidence in court, the the Civil Code. The infirmity comes from the failure
defect of unenforceability is cured of the NPC to comply with the requirements set forth
2. Acceptance of benefits under the contract. If in the EPIRA.
there is performance in either part and there is
acceptance of performance, it takes it out of On this basis, they cannot be classified as an
unenforceable contracts; also estoppel sets in unenforceable contract under Article 1403 (1) of the
by accepting performance, the defect is waived. Civil Code, but as void contracts under Article 1409
(CIVIL CODE, art. 1405) (7) of the Civil Code for being "expressly prohibited
or declared void by law." The last paragraph of
NOTE: The contracts/agreements under the Statute Article 1409 of the Civil Code expressly provides
of Frauds require that the same be evidenced by that void contracts cannot be ratified. (NPC DAMA
some note or memorandum or writing, subscribed v. NPC, G.R. No. 156208)
by the party charged or by his agent, otherwise, the • If performed, restoration is in order, except if
said contracts shall be unenforceable. (CIVIL CODE, pari delicto will apply; (CIVIL CODE, art. 1411 &
art. 1403) 1412)
• The right to set up the defense of nullity cannot
The Statute of Frauds applies only to executory be waived; (CIVIL CODE, art. 1409)
contracts, not to those that are partially or • Imprescriptible (CIVIL CODE, art. 1410); and
completely fulfilled. (Carbonnel v. Poncio, G.R. No.
• Anyone may invoke the nullity of the contract
L-11231)
whenever its juridical effects are asserted
against him (CIVIL CODE, art. 1421)
A right of first refusal is not by any means a
perfected contract of sale of real property. As such, Kinds of void contract: (CIVIL CODE, art. 1409)
a right of first refusal need not be written to be 1) Those lacking in essential elements: No
enforceable and may be proven by oral evidence. consent, no object, no cause (inexistent ones)
(Rosencor Corp v. Inquing, G.R. No. 140479) – essential formalities are not complied with.
Example: Donation propter nuptias – Should
In proving the fact of partial or total performance, conform to formalities of a donation to be valid)
either documentary or oral evidence may be
received. (Averia v. Averia, G.R. No. 141877) 2) Those which are absolutely simulated or
fictitious – no cause. An absolutely simulated
Statute of Frauds is a personal act made by the or fictitious contract is void, and the parties may
parties to the unenforceable contract. Third parties recover from each other what they may have
cannot use the Statute of Frauds as defense, or given under the contract. In absolute simulation,
directly attack the unenforceable contract. (Ayson v. there is a colorable contract but it has no
Court of Appeals, G.R. Nos. L-6501 and L-6599). substance as the parties have no intention to be
bound by it. (Heirs of Dr. Mario S. Intac and
8. VOID OR INEXISTENT CONTRACTS Angelina Mendoza-Intac v. CA, G.R. 173211).
Definition a) NOTE: In absolute simulation, there is a

These contracts have no legal effect (Modina v. CA, colorable contract but the parties have no
G.R. No. 109355) intention to be bound by it. However, if the
parties state a false cause in the contract to
Characteristics: conceal their real agreement, the contract
1. It produces no effect whatsoever either against is relatively simulated and the parties are
or in favor of anyone; (Modina v. CA, G.R. No. still bound by their real agreement. (CIVIL
109355)
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CODE, art. 1345; Valerio v. Refresca, G.R. A stipulation forbidding the owner from
No. 163687) alienating the immovable mortgaged shall be
void.
3) Those which cause or object did not exist at
the time of the transaction – no cause/object. It is a clause in a mortgage giving the
This refers to a contract whose cause or object mortgagee the right to foreclose by executory
could not have existed or could not come into process directed solely against the mortgagor
existence at the time of the transaction. and giving him or her the right to seize and sell
(BALANE 778 (2020)) the mortgaged property, regardless of any
4) Those whose object is outside the commerce subsequent alienations.
of man – no object / illegal / impossible object
3. Pactum Leonina (CIVIL CODE, art. 1799)
5) Those which contemplate an impossible
service – no object / illegal / impossible object A stipulation which excludes one or more
partners from any share in profit or loss is void.
6) Those which intention of parties relative to
principal object of the contract cannot be
ascertained ILLEGAL CONTRACTS
7) Those expressly prohibited or declared void Pari Delicto Doctrine
by law – Contracts w/c violate any legal General Rule:
provision, whether it amounts to a crime or not • Both parties are guilty, no action against each
other; (CIVIL CODE, art. 1412)
Examples: • Those who come in equity must come with
No contract may be entered into upon clean hands; (Department of Public Works and
future inheritance except in cases Highways v. Quiwa, G.R. No. 183444)
expressly authorized by law. (CIVIL CODE,
• Applies only to illegal contracts and not to
art. 1347)
inexistent contracts;
• Does not apply when a superior public policy
No contract which practically amounts to
intervenes.
involuntary servitude, under any guise
whatsoever, shall be valid. (CIVIL CODE,
The Clean Hands Doctrine states that “a litigant
art. 1703)
may be denied relief by a court of equity on the
ground that his conduct has been inequitable, unfair
8) Those whose cause, object or purpose is
and dishonest, or fraudulent, or deceitful as to the
contrary to law, morals, good customs,
controversy in issue.” Bad faith and fraud are
public order or public policy. Example:
allegations of fact that demand clear and convincing
Contract to sell marijuana
proof. (Department of Public Works and Highways
v. Quiwa, G.R. No.183444)
Other void contracts:
1. Pactum Commissorium (CIVIL CODE, art.
Exception: If purpose has not yet been
2088, 2130, 1390)
accomplished and if damage has not been caused
to any 3rd person.
Elements: (MAp)
a. There should be a property Mortgaged
Other exceptions:
by way of security for the payment of
1. Payment of usurious interest. (CIVIL CODE, art.
the principal obligation.
1413)
b. There should be a stipulation for
2. Payment of money or delivery of property for an
automatic Appropriation by the creditor
illegal purpose, where the party who paid or
of the thing mortgaged in case of non-
delivered repudiates the contract before the
payment of the principal obligation
purpose has been accomplished, or before any
within the stipulated period.
damage has been caused to a third person.
(Development Bank of the Philippines
v. CA, G.R. No. 118342)
3. Payment of money or delivery of property made
by an incapacitated person. (CIVIL CODE, art.
2. Pactum De Non Alienando (CIVIL CODE, art.
1415)
2130)
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4. Agreement or contract which is not illegal per se entering into and is unable to understand the
and the prohibition is designed for the protection consequences of his own action.
of the plaintiff. (CIVIL CODE, art. 1416)
5. Payment of any amount in excess of the 2. If agreement is not illegal per se but merely
maximum price of any article or commodity prohibited and prohibition is designated for the
fixed by law or regulation by competent protection of the plaintiff – may recover what he
authority. (CIVIL CODE, art. 1417) has paid or delivered by virtue of public policy.
6. Contract whereby a laborer undertakes to work (CIVIL CODE, art. 1416)
longer than the maximum number of hours fixed
by law (CIVIL CODE, art. 1418 & 1419) 3. If a subsequent contract results directly
7. One who lost in gambling because of fraudulent because of a previous illegal contract, the
schemes practiced on him is allowed to recover subsequent contract is also void and inexistent.
his losses (REVISED PENAL CODE, art. 313) even “The illegality of the Sub-Contract Agreement
if gambling is prohibited. necessarily affects the [resulting] Deed of
Assignment because the rule is that an illegal
Requisites of Illegal Contracts: agreement cannot give birth to a valid contract.
1. Contract is for an illegal purpose; To rule otherwise is to sanction the act of
2. Contract must be repudiated by any of the entering into transaction the object of which is
parties before purpose is accomplished or expressly prohibited by law and thereafter
damage is caused to third parties; and execute an apparently valid contract to
3. Court believes that public interest will be served subterfuge the illegality. The legal proscription
by allowing recovery (discretionary upon the in such an instance will be easily rendered
court). nugatory and meaningless to the prejudice of
• Based on remorse; the general public.” (Gonzalo v. Tarnate, G.R.
• Illegality is accomplished when parties No. 160600)
entered into contract;
• Before it takes effect – Party which is Mutual restitution in void contracts
remorseful prevents it. General rule: Parties should return to each other
what they have given by virtue of the void contract
Where laws are issued to protect certain in case
sectors: consumer protection, labor, and usury
law Where nullity arose from defect in essential
1. Consumer Protection – If price of commodity elements:
is determined by statute, any person paying an 1. Return object of contract and fruits
amount in excess of the maximum price allowed 2. Return price plus interest
may recover such excess. (CIVIL CODE, art.
1417) Exception: No recovery can be had in cases where
2. Labor – If the law sets the minimum wage for nullity of contract arose from illegality of contract
laborers, any laborer who agreed to receive less where parties are in pari delicto. (CIVIL CODE, art.
may still be entitled to recover the deficiency; if 1412)
the law sets max working hours and laborer who
undertakes to work longer may demand Exceptions to the exception:
additional compensation. (CIVIL CODE, art. 1418 1. When incapacitated – Not obliged to return what
& 1419) he gave but may recover what he has given
3. Interest paid in excess of the interest allowed 2. Other party is less guilty or not guilty. (CIVIL
by the usury law may be recovered by debtor CODE, art. 1412)
with interest from date of payment. (CIVIL CODE,
art. 1413) C. NATURAL OBLIGATIONS
Effects of illegal contracts Natural obligations, not being based on positive law
1. If one party is incapacitated, courts may allow but on equity and natural law, do not grant a right of
recovery of money, property delivered by action to enforce their performance, but after
incapacitated person in the interest of justice. voluntary fulfillment by the obligor, they authorize
(CIVIL CODE, art. 1415) the retention of what has been delivered or rendered
by reason thereof. (CIVIL CODE, art. 1423)
Pari delicto doctrine cannot apply because an
incapacitated person does not know what he is
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Examples of natural obligations enumerated 2. Intention or at least the expectation, that

under the Civil Code: such conduct shall be acted upon, or
i. Performance after the civil obligation has influence, the other party or other
prescribed persons;
ii. Reimbursement of a third person for a debt 3. Knowledge, actual or constructive, of the
that has prescribed real facts
iii. Restitution by minor after annulment of
contract B. As related to the party claiming the
iv. Delivery by minor of money or fungible thing estoppel (IRA)
in fulfillment of obligation 1. Ignorance or lack of knowledge and of
v. Performance after action to enforce civil the means of knowledge of the truth as to
obligation has failed the facts in question
vi. Payment by heir of debt exceeding value of 2. Reliance in good faith, upon the conduct
property inherited or statement of the party to be estopped;
vii. Payment of legacy after will has been declared and
void. (CIVIL CODE, art. 1423-1430) 3. Action or inaction based thereon of such
a character as to change the position or
D. ESTOPPEL status of the party claiming the estoppel,
to his injury, detriment, or prejudice.
Definition (Manila International Airport Authority v.
It is a condition or state by virtue of which an Ding Velayo Sports Center, Inc., G.R.
admission or representation is rendered conclusive
No. 161718, Dec. 14, 2011)
upon the person making it and cannot be denied or
disproved as against the person relying thereon.
(CIVIL CODE, art. 1431) Requisites of estoppel by laches (CLID)
1. Conduct on the part of the defendant, or of
Estoppel is effective only between the parties one under whom he claims, giving rise to the
thereto or their successors in interest. (CIVIL CODE, situation of which complaint is made;
art. 1439) 2. Delay in asserting the complainant’s right, the
complainant having had knowledge or notice
Kinds:
of the defendant’s conduct and having been
1. Estoppel in pais (by conduct) afforded an opportunity to sue; actual
(a) Estoppel by silence knowledge of the commission of the adverse
(b) Estoppel by acceptance of benefits act is not necessary, it being enough that
2. Technical estoppel such knowledge may be imputed to the
(a) Estoppel by deed complainant because of circumstances of
(b) Estoppel by record which he was cognizant;
(c) Estoppel by judgment 3. Lack of knowledge or notice on the part of the
(d) Estoppel by laches defendant that the complainant would assert
the right on which he bases his suit; and
Requisites of estoppel in pais 4. Injury or prejudice to the defendant in the
A. As related to the party to be estopped event relief is accorded to the complainant, or
(CIK) the suit is not held to be barred. (Cimafranca
1. Conduct which amounts to a false v. IAC, G.R. No. L-68687, Jan. 31, 1987)
representation or concealment of
material facts, or at least which is E. TRUSTS
calculated to convey the impression that
the facts are otherwise than, and Definition
A fiduciary relationship between a person who
inconsistent with those which the party
establishes a trust (trustor), one in whom confidence
subsequently attempts to assert; is reposed as regards property for the benefit of
another person (trustee), and a person for whose
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benefit the trust has been created (beneficiary). the Code of Commerce, the Rules of Court and
(CIVIL CODE, Art. 1440) special laws applies. (CIVIL CODE, Art. 1442)
It is a legal relationship between one person who KINDS OF TRUST

has equitable ownership of the property and
another who owns the legal title to the property. 1. EXPRESS TRUST
(Oco v. Limbaring, G.R. No. 161298)
Definition
Characteristics of a Trust Created by express agreement of the parties, or by
1. It is a relationship;
intention of trustor. (CIVIL CODE, Art. 1441)
2. Fiduciary;
3. Created by law or agreement
Express trusts are those which are created by the
4. Involves property, not merely personal duties;
direct and positive acts of the parties, by some
5. Where the legal title is held by one, the
writing or deed, or will, or by words either expressly
equitable title or beneficial title is held by
or impliedly evincing an intention to create a trust.
another;
(Ramos v. Ramos, G.R. No. L-19872)
6. Involves the existence of equitable duties
imposed upon the holder of the title to the
property to deal with it for the benefit of another; Requisites in Creating an Express Trust
and a. Clear intent to establish trust; (Art.
7. Arises as a result of a manifestation of intention 1444)
to create the relationship. (Morales v. CA, G.R. b. Direct and positive acts of the parties
No. 117228) evidence the intention to create trust
by means of:
Parties to a Trust i. Writing;
1. Trustor – The person who establishes the trust. ii. Deed;
2. Trustee – The person in whom confidence is iii. Will;
reposed as regards property for the benefit of iv. Words. (Canezo v. Rojas,
another. G.R. No. 148788)
3. Beneficiary – The person for whose benefit the NOTE: No particular words are required for the
trust has been created. (Penalber v. Ramos, creation of an express trust, it being sufficient that a
G.R. No. 178645) trust is clearly intended. (CIVIL CODE, Art. 1444)
TRUST (CIVIL CODE, STIPULATION Proof Required for Express Trusts Concerning
Art. 1441) POUR AUTRUI Immovables
(Mamaril v. BSP, No express trust concerning an immovable or any
G.R. No. 179382, interest therein may be proved by parol evidence.
Jan. 14, 2013.) (CIVIL CODE, Art. 1443)
Arises either by virtue Arises only by virtue
of a contract or by of a contract However, when oppositors failed to timely object
operation of law when the petitioner tried to prove by parol evidence
Either express or Always express the existence of an express trust over immovable,
implied there i ee e to e a wai er ince Art i
Continues to exist Third person must in the nature of a statute of frauds. (Penalber v.
unless repudiated have communicated Ramos, G.R. No. 178645).
his acceptance to the
obligor before its NOTE: To prove an express trust over an
revocation by the immovable or any interest therein, there must
obligee or the original always be a showing of some documents proving
parties the same. (Pascual v. Meneses, G.R. No. L-18838)
Trustees Cannot Donate Property in Trust Requisites for Creating a Testamentary Trust
Trustees cannot donate the property entrusted to a. Sufficient words to raise a trust;
them. (CIVIL CODE, Art. 736) b. Definite subject;
c. Certain or ascertained object. (Lorenzo v.
NOTE: The principles of the general law of trusts, Posadas, Jr., G.R. No. L-43082)
insofar as they are not in conflict with the Civil Code,
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On Declining Trustees Implied trusts are remedies against unjust

General Rule: No trust shall fail because the enrichment. Under the general principles on trust,
trustee appointed declines the designation. (CIVIL equity converts the holder of property right as
CODE, Art. 1445) trustee for the benefit of another if the
circumstances of its acquisition makes the holder
NOTE: In case of refusal to accept an express trust, ineligible in good conscience to hold and enjoy it.
the court will appoint a trustee. (Juan v. Yap, Sr., G.R. No. 182177).
Exception: When the contrary appears in the
instrument constituting the trust. (CIVIL CODE, Art. Chapter on Implied Trusts is not an exclusive
1445) list
The chapter on implied trust does not exclude others
Acceptance by Beneficiary established by the general law of trust which do not
Acceptance by the beneficiary is necessary. If he violate our rules and laws. (CIVIL CODE, Art. 1447)
repudiates or declines, the trust does not become
effective. (CIVIL CODE, Art. 1446) When there is no trust
A trust will not be created when for the purpose of
NOTE: The beneficiary’s acceptance shall be evading the law prohibiting one from taking or
presumed if the trust imposes no onerous holding real property, one takes conveyance thereof
condition upon the beneficiary and if there is no in the name of a third person. (Kiel v. Estate of
proof to the contrary. (CIVIL CODE, Art. 1446) Sabert, G.R. No. 21639.)
On Acquisitive Prescription If there is an express intention to create a trust, the

General Rule: A trustee cannot acquire ownership trust is express and not implied, even if the
of property entrusted to him through prescription, as situations falls under any of the provisions in this
possession of a trustee is not adverse. (Canezo v. chapter. (Cuaycong v. Cuaycong, G.R. No. L-
Rojas, G.R. No. 148788.) 21616.)
Exception: (REKA) There can be no implied trust created over land in

a. Trustee performed unequivocal acts of favor of a foreigner that would amount to a violation
Repudiation amounting to an ouster of the of the constitution. (Encarnacion v. Johnson, G.R.
cestui que trust; No. 192285.)
b. Positive acts of repudiation have been made
Known to the cestui que trust; Resulting Trust vs. Constructive Trust
c. Evidence is clear and conclusive; and RESULTING TRUSTS CONSTRUCTIVE
d. Adverse possession of the trustee must be TRUSTS
at least 10 years in the concept of an owner. Based on the equitable Created by the
doctrine that valuable construction of equity
(Canezo v. Rojas, G.R. No. 148788.)
consideration & not in order to satisfy the
NOTE: Above elements must concur.
legal title determines demands of justice &
equitable title or prevent unjust
Extinguishment of an Express Trust
interest; presumed to enrichment
a. Accomplishment of the aims of the trust;
always have been
b. Expiration of the agreed term; contemplated by the
c. Mutual agreement of all parties; parties
d. Happening of a resolutory condition; Arise from the nature Arise contrary to
e. Total loss of the object of the trust; or intention against one
f. Annulment or rescission of the trust; circumstances of the who, by fraud, duress
g. Decision of the court declaring termination; consideration involved or abuse of confidence,
h. Merger of the rights of the trustor and the in a transaction obtains or hold the
trustee; whereby one person legal right to property,
i. Prescription; and thereby becomes which he ought not, in
j. Upon the trustee's death (Canezo v. Rojas, invested with legal title equity, & good
G.R. No. 148788.) but is obligated in conscience, to hold
equity to hold his legal
title for the benefit of
2. IMPLIED TRUST
another
Basis of implied trust is equity (O’Laco v. Co Cho Chit, G.R. No. 58010.)
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Constructive Trust
Article 1450 is an illustration of an implied trust Burden of proof
which is constructive. It presupposes a situation The burden of proving the existence of a trust is on
where a person, using his own funds, purchases a the party asserting existence of trust, and such proof
certain piece of land in behalf of another who, in the must be clearly and satisfactorily show the existence
meantime, may not have sufficient funds to of the trust and its elements. (Jarantilla, Jr. v.
purchase the land. The property is then transferred Jarantilla, G.R. No. 154486.)
in the name of the trustee, the person who paid for
the land, until he is reimbursed by the beneficiary, NOTE: Presumption is that he who pays for a thing
the person for whom the land is purchased. It is only intends a beneficial interest for himself. (e.g. where
after the beneficiary reimburses the trustee of the the club share was bought and paid for by A and
purchase price that the former can compel placed in the name of its officer B, a resulting trust
conveyance of the purchased property from the is presumed as a matter of law in favor of A. The
latter. (Nakpil v. IAC, G.R. No. 74449.) burden shifts to show otherwise) (Sime Darby
Pilipinas v. Mendoza, G.R. No. 20227.)
A constructive trust does not arise on every moral
wrong in acquiring or holding property or on every b. Implied Trust in Donation
abuse of confidence in business or other affairs;
such a trust arises & will be declared only on There is also an implied trust when a donation is
wrongful acquisitions or retentions of property of made to a person but it appears that although the
which equity takes cognizance. It has been broadly legal estate is transmitted to the donee, he
ruled that a breach of confidence although in nevertheless is either to have no beneficial interest
business or social relations, rendering an acquisition or only a part thereof. (CIVIL CODE, Art. 1449)
or retention of property by one person
unconscionable against another, raises a
constructive trust. (Policarpio v. CA, G.R. No. c. Implied Trust in Sale of
116211.) Property
Resulting Trust If the price of a sale of property is loaned or paid by

Resulting trusts are species of implied trusts that are one person for the benefit of another & the
presumed always to have been intended by the conveyance is made to the lender or payor to secure
parties (Ossorio Pension Foundation v. Court of the payment of the debt, a trust arises by operation
Appeals, G.R. No. 162175.) of law in favor of the person to whom the money is
loaned or for whom it is paid. The latter may redeem
the property & compel a conveyance thereof to him.
a. Implied Trust When Property is
(CIVIL CODE, Art. 1450)
Granted to One/Trustee But
Price is Paid by Another for the
d. Implied Trust in Co-Ownership
Interest of Beneficiary
If two or more persons agree to purchase property
There is an implied trust when property is sold, & the & by common consent the legal title is taken in the
legal estate is granted to one party but the price is name of one of them for the benefit of all, a trust is
paid by another for the purpose of having the created by force of law in favor of the others in
beneficial interest of the property. The former is the proportion to the interest of each. (CIVIL CODE, Art.
trustee, while the latter is the beneficiary. 1452)
However, if the person to whom the title is conveyed A resulting trust arises in the situation, because of
is a child, legitimate or illegitimate, of the one paying the intention to create one. Purchasers are co-
the price of the sale, no trust is implied by law, it owners of the property. In the absence of any
being disputably presumed that there is a gift in specific agreement to the contrary, their shares are
favor of the child. (CIVIL CODE, Art. 1448) presumed equal.
Elements of purchase money resulting trust
e. Implied Trust in Succession
1. Actual payment of money, property, or service,
or an equivalent valuable consideration; and
2. Such consideration must be furnished by the When land passes by succession to any person and
alleged beneficiary of a resulting trust. (Trinidad he causes the legal title to be put in the name of
v. Imson, G.R. No. 197728.) another, a trust is established by implication of law
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for the benefit of the true owner. (CIVIL CODE, Art. In order to prevent unjust enrichment on the part of
1451) the fiduciary, an implied constructive trust is created
in this circumstance.
This article provides for a resulting trust there being
a clear intention to establish a trust. The refers to Persons covered
inherited land. There is no good reason why the Any person holding a fiduciary position such as a
principle cannot apply to personal properties. trustee, guardian, agent, partner, or a confidential
employee, among others.
f. Property Conveyed in Reliance
upon His Declared Intention to Rationale of rule
Hold it For Another To prevent fiduciary from temptation of putting his
own self-interest above that of his principal whom he
When property is conveyed to a person in reliance is supposed to protect. It also is intended to keep
upon his declared intention to hold it for, or transfer and encourage the fiduciary to remain honest and
it to another or the grantor, there is an implied trust loyal to his principal.
in favor of the person whose benefit is
contemplated. (CIVIL CODE, Art. 1453) i. Property Acquired Through
Mistake or Fraud
An implied resulting trust is created because of the
declared intention of the grantee to hold or transfer If property is acquired through mistake or fraud, the
the property to the grantor or to another person. person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the
g. An Absolute Conveyance to person from whom the property comes. (CIVIL
Secure Performance of CODE, Art. 1456)
Obligation
This trust is created by law to prevent unjust
enrichment on the part of the acquirer to the
If an absolute conveyance of property is made in
prejudice of the true owner. The mistake must be
order to secure the performance of an obligation of
committed by a third person. If made by a party,
the grantor toward the grantee, a trust by virtue of
there is no trust.
law is established. If the fulfillment of the obligation
is offered by the grantor when it becomes due, he
may demand the reconveyance of the property to E.g. Conveyance made by seller of a property
him. (CIVIL CODE, Art. 1454) acquired through pactum commisorium is void, and
thus not vest title to the buyer. Such a situation falls
squarely under Art. 1456, where the buyer is
A resulting trust is one that arises by implication of
deemed to have acquired the property by mistake or
law and presumed always to have been
through ineffectual transfer (Home Guaranty Corp.
contemplated by the parties, the intention as to
v. La Savoie Dev. Corp G.R. No. 168616.).
which can be found in the nature of their transaction
although not expressed in a deed or instrument of
conveyance. (Heirs of Yap v. CA, G.R. No. 133047.) Violation of a condition in donation
There is an intention to create trust, although it was No trust is created if a condition in a valid donation
not reflected in the deed of reconveyance, therefore, has been breached by the donee. The property
an implied resulting trust is created. remains in ownership of the done subject to proper
action for revocation. If the action has prescribed
however, the donee will remain as the rightful
h. Trustee’s Use of Funds Held in owner.
Trust
Oral Evidence
When any trustee, guardian or other person holding An implied trust may be proved by oral evidence.
a fiduciary relationship uses trust funds for the (CIVIL CODE, Art. 1457)
purchase of property & causes the conveyance to
be made to him or to a third person, a trust is It is deducible from the nature of the transactions as
established by operation of law in favor of the matters of intent or which are super-induced on the
person to whom the funds belong. (CIVIL CODE, transaction by operation of law, independently of the
Art. 1455) particular intention of the parties.
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When an immovable or an interest therein is 3. The act must be Unilateral distinguishing it from
involved in an express trust, parol evidence is not contract which is based on agreement.
allowed. But, when trust is implied, parol evidence is (PINEDA 15 (2009))
allowed to prove its existence.
Kinds of quasi-contract
Consequently, if property involved in express trust is 1. Negotiorum Gestio is the voluntary
movable, parol evidence is allowed. management of the property or affairs of
another in times of emergency without the
Proof needed to prove trust by parol evidence owner’s authority. (CIVIL CODE, art. 2144)
It must be trustworthy and received by the courts
with caution, and should not be made to rest on Obligation created: Return of the property by
loose, equivocal or indefinite declarations. the officious manager to the owner once the
Trustworthy evidence is required because oral emergency ceases, and for the owner to
evidence can easily be fabricated. (Herbon v. Palad, reimburse expenses incurred by the officious
G.R. No. 149542.). Further, it must be clear, manager. (CIVIL CODE, art. 2150)
satisfactory, and convincing, as intent to establish
trust cannot rest on vague, uncertain evidence, or 2. Solutio Indebiti is the juridical relation, which
on loose, equivocal, or indefinite declaration. (Heirs is created when something is received when
of Narvasa Sr. v. Imbornal, G.R. 182908.) there is no right to demand it and it was unduly
delivered through mistake. (CIVIL CODE, art.
Q: What is the applicable prescriptive period 2154)
for actions for the reconveyance of real
property based on implied trust? Obligation created: Recipient to return the
property delivered through mistake.
A: 10 years, reckoned from the time the cause of
action accrues. (CIVIL CODE, Art. 1144; Sps. Dico
v. Vizcaya Management Corporation, G.R. No. SOLUTIO INDEBITI NATURAL
161211.) OBLIGATIONS
In solutio indebiti, the The person making the
In arguing that the action for reconveyance had payment or delivery is payment or delivery
prescribed, the petitioners claimed that the cause of made on the basis of a knows that he has no
action of the respondent should be based on the
mistake, hence the legal obligation to pay
latter's Deed of Sale and thus the respondent's right
of action should have accrued from its recipient has the legal or to deliver but still
execution.110 This Court, however, ruled that the obligation to return. voluntarily makes such
right of action accrued from the time the property (CIVIL CODE, art. payment or delivery.
was registered because registration is the act that 2154) For this reason, once
signifies that the adverse party repudiates the payment or delivery
implied trust: (Sps. Roberto Aboitiz And Maria has been made, there
Cristina Cabarrus v. Sps. Peter Po and Victoria Po,
is no right to ask for the
G.R. No. 208450 and 208497)
return. (CIVIL CODE,
F. QUASI-CONTRACTS art. 1423)
Definition 3. Other cases of quasi-contracts (CIVIL CODE,

Quasi-contracts are juridical relations resulting from art. 2164-2175)
lawful, voluntary and unilateral acts, which has for
its purpose, the payment of indemnity to the end that
no one shall be unjustly enriched or benefited at the When, without the knowledge of the person
expense of another. (CIVIL CODE, art. 2142) obliged to give support, it is given by a
stranger, the latter shall have a right to claim
the same from the former, unless it appears
Distinguished from other Sources (LUV)
that he gave it out of piety and without
1. The act giving rise to a quasi-contract must be
intention of being repaid. (CIVIL CODE, art.
Lawful distinguishing it from delict; 2164)
2. The act must be Voluntary distinguishing it from
a quasi-delict which is based on fault or
When funeral expenses are borne by a third
negligence; and
person, without the knowledge of those
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relatives who were obliged to give support to are governed by articles 1236 and 1237. (CIVIL
the deceased, said relatives shall reimburse CODE, art. 2173)
the third person, should the latter claim
reimbursement. (CIVIL CODE, art. 2165) When in a small community a majority of the
inhabitants of age decide upon a measure for
When the person obliged to support an protection against lawlessness, fire, flood, storm
orphan, or an insane or other indigent person or other calamity, any one who objects to the plan
unjustly refuses to give support to the latter, and refuses to contribute to the expenses but is
any third person may furnish support to the benefited by the project as executed shall be
needy individual, with right of reimbursement liable to pay his share of said expenses. (CIVIL
from the person obliged to give support. The CODE, art. 2174)
provisions of this article apply when the father
or mother of a child under eighteen years of Any person who is constrained to pay the taxes
age unjustly refuses to support him. (CIVIL of another shall be entitled to reimbursement from
CODE, art. 2166) the latter. (CIVIL CODE, art. 2175)
When through an accident or other cause a NOTE: The Civil Code provides [the
person is injured or becomes seriously ill, and he abovementioned] enumeration of quasi-contracts,
is treated or helped while he is not in a condition but the list is not exhaustive and merely provides
to give consent to a contract, he shall be liable to examples. (Metrobank v. AMC, G.R. No. 170498)
pay for the services of the physician or other
person aiding him, unless the service has been
rendered out of pure generosity. (CIVIL CODE,
art. 2167)
When during a fire, flood, storm, or other calamity,

property is saved from destruction by another
person without the knowledge of the owner, the
latter is bound to pay the former just
compensation. (CIVIL CODE, art. 2168)
When the government, upon the failure of any

person to comply with health or safety regulations
concerning property, undertakes to do the
necessary work, even over his objection, he shall
be liable to pay the expenses. (CIVIL CODE, art.
2169)
When by accident or other fortuitous event,

movables separately pertaining to two or more
persons are commingled or confused, the rules
on co-ownership shall be applicable. (CIVIL
CODE, art. 2170)
The rights and obligations of the finder of lost

personal property shall be governed by articles
719 and 720. (CIVIL CODE, art. 2171)
The right of every possessor in good faith to

reimbursement for necessary and useful
expenses is governed by article 546. (CIVIL
CODE, art. 2172)
When a third person, without the knowledge of

the debtor, pays the debt, the rights of the former
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V. SALES
A. NATURE AND FORM
TOPIC OUTLINE UNDER THE SYLLABUS Contract of Sale
It is a contract where one of the contracting parties
A. NATURE AND FORM (Seller) obligates himself to transfer the ownership
1. Essential requisites and to deliver a determinate thing, and the other
a. Elements of a contract of sale party (Buyer) to pay a price certain in money or its
b. Requisites of a valid subject matter equivalent. A contract of sale may be absolute or
c. Requisites for a valid price conditional. (Art. 1458)
2. Perfection
a. Requirements of a perfection of a sale
1. ESSENTIAL REQUISITES
3. Contract of sale v. contract to sell
B. CAPACITY TO BUY OR SELL a. Elements of a Contract of Sale:

1. Absolute incapacity (CSP)
2. Relative incapacity 1. Consent
2. Determinate or Determinable Subject Matter
C. EFFECTS OF THE CONTRACT WHEN THE 3. Price certain in money or its equivalent (Coronel
THING SOLD HAS BEEN LOST v. CA, G.R. No. 103577, 1996)
D. OBLIGATIONS OF VENDOR The absence of any essential elements negates

the existence of a perfected contract of sale.
E. OBLIGATIONS OF VENDEE (Dizon v. CA, G.R. 122544, 1999)
F. BREACH OF CONTRACT Characteristics of Contract of Sale: (NOC-

1. Remedies PCBR)
a. Remedies of seller in case of sale of 1. Nominate
movables 2. Onerous
b. Remedies of seller in case of sale of 3. Consensual
immovables 4. Principal
c. Remedies of buyer 5. Commutative
2. Recto Law and Maceda Law 6. Bilateral
a. Recto Law: Sale of movables on 7. Reciprocal
installment (Arts. 1484-1486)
b. Maceda Law (R.A. 6552) In Suntay v. Court of Appeals, SC held that “[t]hough
3. Other Remedies the notarization of the deed of sale in question vests
a. Remedies in double sale in its favor the presumption of regularity, it is not the
b. Remedy of rescission in contracts
intention nor the function of the notary public to
covering immovables
validate and make binding an instrument never, in
G. EXTINGUISHMENT the first place, intended to have any binding legal
1. In general effect upon the parties thereto. The intention of the
2. Pacto de retro sale parties still and always is the primary consideration
3. Equitable Mortgage in determining the true nature of a contract” and
4. Legal Redemption “even an apparently valid notarization of a document
does not guarantee its validity”. (Dizon v. Matti, Jr.,
H. ASSIGNMENT OF CREDITS G.R. No. 215614 (Resolution), March 27, 2019)
Article 1354 of the Civil Code provides that there is

a presumption that even though the contract did not
state a case, a lawful one exists and it is incumbent
upon the party impugning the contract to prove the
contrary. In the case at hand, since both the DOS
(deed of sale) and COS (contract of sale) were
public documents, the oral evidence of lack of
consideration were not sufficient to overthrow the
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presumption of the existence of a valid 3. Sale of land: A sale of real property or of an

consideration. (Sepe v. Heirs of Kilang, G.R. No. interest therein.
199766, April 10, 2019)
Exceptions to coverage of statute of frauds in
FORMALITIES OF CONTRACT sales contracts:
Form not important for validity of sale 1. Written: When there is a note or memorandum
GR: Contract of sale is consensual, i.e., perfected in writing and subscribed to by party or his agent
by mere consent as to price and subject matter (or (contains essential terms of the contract) (Art.
object of the contract). (Art. 1475) 1403)
2. Partial execution: When there has been partial
Non-compliance with the formal requirements does performance/execution (seller delivers with
not affect the validity of sale. (Fule v. CA, G.R. No. intent to transfer title/receives price; or when
L-40502 & L-42607, 1976) buyer partially pays the price) (Art. 1405)
3. Failure to object: When there has been failure
When form is important for validity; exception to object to presentation of evidence (oral) (Art.
by specific provision of law; 1405)
1. Donations and wills (Arts. 749, 804); 4. E-commerce: When sales are effected through
2. Power to sell a piece of land granted to an agent electronic commerce through electronic
must be in writing– otherwise sale is VOID (Art. documents which are the functional equivalent
1874); of the written documents for validity,
3. Sale of large cattle; must also be registered with enforceability and evidentiary purposes. (R.A.
Municipal treasurer – otherwise VOID (Art. 8792, Secs. 7 and 12)
1581; Revised Administrative Code, Sec. 529);
4. Sale of land by non-Christian if not approved by While a sale of land appearing in a private deed is
Governor – VOID (Tac-an v. CA, G.R. No. L- binding between the parties, it cannot be considered
38736, 1984). binding on third persons if not embodied in a public
instrument and recorded in the Registry of Deeds.
Article 1358, which requires the embodiment of (Secuya v. Vda. De Selma, G.R. No. 136021, 2000)
certain contracts in a public instrument, is only for
convenience, and registration of the instrument only Although the execution of a deed of sale is
adversely affects third parties. Formal requirements absolutely unnecessary for validity, it is
are, therefore, for the benefit of third parties; and nevertheless important for 1) the enforceability of
non-compliance therewith does not adversely affect executory contracts under Article 1403 of the Civil
Code, 2) the convenience of the parties under
the validity of the contract and the rights and
Article 1358 of the same Code, and 3) the eventual
obligations of the parties thereunder. (Dalion v. CA, registration of the sale with the land registration
182 SCRA 872,1990) authority under P.D. 1529. A sale would be perfectly
valid even if no deed whatsoever had been
Statute of Frauds executed, subject only to the requirements of the
Note that if particular form is required under the Statute of Frauds. As such, the parties may prove
statute of frauds and the same is not followed: the existence of a perfected or performed contract
• While the sale is valid, it is UNENFORCEABLE of sale through any competent evidence available,
even as to the parties to the contract of sale. be it an original deed, a copy thereof, a
memorandum, or even testimony on the prior,
subsequent, and contemporaneous acts of the
When form (should be in writing and not merely parties. (Tamayao v. Lacambra, G.R. No. 244232,
verbal) is important for enforceability [Statute of November 3, 2020)
Frauds](Art. 1403 [2])
1. A contract not to be performed in 1 year: A sale FORMATION OF THE CONTRACT
agreement which by its terms is not to be Three Stages in Life of a Contract of Sale
performed within a year from the making 1. Policitacion/Negotiation Stage – offer floated,
thereof; acceptance is floated but they do not meet;
2. Php 500 and above: An agreement for the sale covers the period when parties indicate their
of goods, chattels or things in action, at a price interest but no concurrence of offer and
not less than PhP500 acceptance.
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2. Perfection – the “birth” of the contract, 2. Subject matter – an option right to an

concurrence of all requisites; meeting of the “unaccepted unilateral offer to buy or sell”, or an
minds upon the object and price. “accepted promise to sell, or to buy”:
3. Consummation – the “death” of the contract, (a) A determinate or determinable object
parties perform their respective undertakings (b) For a price certain (including manner of
(Arts. 1475, 1479, 1493-1506; Villanueva & payment)
Tiansay, Law on Sales, 118-119, 2016) 3. Prestation – a consideration separate from
purchase price for option given, i.e., Option
Rules: (Villanueva & Tiansay, Law on Sales, 126,
1. Offer is floated Prior to acceptance, may be 2016)
withdrawn at will by offeror
2. Offer floated Without acceptance, Characteristics of Option Contract: (SPNO-
with a period extinguished when period CUUP)
has ended and may be 1. Not the contract of sale by itself, Separate
withdrawn at will by offeror;
and distinct
right to withdraw must not be
arbitrary otherwise, liable to 2. Nominate
damage under Art. 19, 20, 21 3. Principal - but can be attached to other principal
of Civil Code contracts
3. Offer floated Extinguished by 4. Onerous
w/ condition happening/non-happening of 5. Commutative
condition 6. Unilateral – versus contract of sale which is
4. Offer floated Continue to be valid bilateral
without period/ depending upon 7. Preparatory
without condition circumstances of time, place 8. Unaccepted or unexercised contractual offer
and person
5. Offer is floated Original offer is destroyed, Consideration in an option contract may be anything
and there is there is a new offer; cannot of value, unlike in sale where it must be price certain
counteroffer go back to original offer in money. (San Miguel Philippines v. Huang, G.R.
No. 137290, 2000) However, when the
6. Offer is floated No authority of offeror to consideration is not monetary, the consideration
modify offer must be clearly specified as such in the option
7. Offer accepted Proceed to perfected stage contract or clause. When the written agreement
absolutely itself does not state the consideration for the option
contract, the offeree bears the burden of proving the
OPTION CONTRACT
existence of a separate consideration for the option.
A contract granting an exclusive right in one person,
(PNOC v. Keppel Phils. Holdings, Inc., G.R. No.
for which he has paid a separate consideration, to
202050, 2016)
buy a certain object within an agreed period of time.
(Art. 1479) (Note: an option can be in an
How Exercised: Notice of acceptance should be
independent/standalone contract or simply
communicated to offeror even without actual
embedded as a provision within a contract that gives
payment of the option money as long as there is
the option holder the right, but not the obligation, to
delivery of payment in consummation stage. (Nietes
exercise an option to buy or sell a subject matter.)
v. CA, G.R. No. L-32873, 1972)
NOTE: There is no presumption of consideration, it Situations in an Option Contract:
needs to be proven (Sanchez v. Rigos, G.R. No. L- 1. With separate consideration
25494, 1972) • Option contract is valid
• Offeror cannot withdraw offer until after expiry
Option - an unaccepted or unexercised contractual period
offer (Adelfa Properties v. CA, G.R. No. 111238, • Subject to damages for breach of option
1995) contract if offeror withdraws during the time
stipulated but not to specific performance
Elements of Valid Option Contract: because an option contract does not create an
1. Consent – meeting of the minds
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obligation to give (Tuazon v. Del Rosario- and it has no separate consideration. It is not subject
Suares, G.R. No. 168325, 2010) to specific performance because there is no
contractual relationship here and it is not an
2. Without separate consideration obligation to give (not a real contract).
Even if the option without separate consideration
constitute a certain offer, still it must still be New doctrine: May be subject to specific
exercised within the option period and the performance in a specific instance.
acceptance must still be absolute. (Tuazon v. Del
Rosario-Suares, G.R. No. 168325, 2010) The RFR is only subject to specific performance
insofar as it is attached to a valid written principal
Important rules on options: contract (e.g., lease). RFR becomes one of the
1. If the period for the exercise of the option is not considerations in the contract. If RFR is violated,
supported by a separate consideration, the and property sold to another buyer in bad faith, the
offeror is still free and has the right to withdraw sale to the 3rd party buyer is rescissible. The price
the offer before its acceptance, or, if an for the 3rd party buyer is to be the basis for the price
acceptance has been made, before the offeror’s of the sale back to the one with the RFR. Lessee
coming to know of such fact, by communicating can exercise the right of first refusal once the sale to
that withdrawal to the offeree. the third party is set aside or rescinded. (Equatorial
2. The right to withdraw, however, must not be Dev’t v. Mayfair Theater, G.R. No. 106063, 2006)
exercised whimsically or arbitrarily; otherwise, it
could give rise to a damage claim under Article Effect of new doctrine: While valid option contract
19 (Abuse of Rights). is not subject to specific performance, right of first
3. If the period has a separate consideration, a refusal, may be subject to specific performance. It
contract of “option” is deemed perfected, and it recognizes recovery of damages based on abuse of
would be a breach of contract to withdraw the rights doctrine. The consideration for the RFR is
offer during the agreed period. technically the consideration for the mother contract
4. The option is an independent contract in itself, as the RFR has value to the party in whose favor it
and it is to be distinguished from the proposed is granted. In practice, the RFR may result in the
sales contract. If the optioner-offeror withdraws lease rentals being adjusted downwards to account
the offer before its acceptance by the optionee- for the value of the RFR.
offeree, the optionee-offeree may not sue for
specific performance on the proposed contract Only after the optionee fails to exercise his right of
since it has not been perfected; however, the first priority under the same terms and within the
optioner-offeror is liable for damages for breach period contemplated, could the owner validly offer to
of the option. sell the property to a third person under the same
5. In these cases, if the consideration is intended terms as offered to the optionee. (Parañaque Kings
to be part of the consideration for the main v. CA, G.R. No. 111538, 1997)
contract with a right of withdrawal on the part of
the optionee, the main contract could be Option Contract Distinguished from Right of
deemed perfected; a similar instance would be First Refusal
an “earnest money” in sale that can evidence its OPTION CONTRACT RIGHT OF FIRST
perfection. (Ang Yu Asuncion v. CA, G.R. No. REFUSAL
109125, 1994) Principal contract; Accessory; cannot
stands on its own stand on its own
RIGHT OF FIRST REFUSAL Needs separate Does not need
A right of first refusal (“RFR”) covers a situation consideration separate
consideration
wherein a promise on the part of the owner of a
Subject matter and There must be
property is made that if he decides to sell the
price must be valid subject matter but
property in the future, he will first offer the same to price not important
the promisee. Not conditional Conditional
Not subject to specific Subject to specific
It creates a promise to enter into a contract of sale performance performance
in the event the seller decides to sell his/her property
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Mutual promise to buy and sell (Art. 1479) EMPTIO REI EMPTIO SPEI
1. Promise to buy and sell a determinate thing for SPERATAE
a price certain: reciprocally demandable; “The purchase of what “Purchase of hope”
2. Accepted unilateral promise to buy or to sell: we hope”
binding upon the promissor if promise Sale of an expected Sale of a hope or
supported by a consideration distinct from the thing/ future thing expectancy that the
thing will come to
price.
existence; sale of the
hope itself
Implied renewals do not include the option to buy, Sale is subject to a Sale is effective even
as it is not germane to the lessee's continued use of suspensive if the thing does not
the property. Based on Article 1643, the lessee's condition—that the come into existence,
main obligation is to allow the lessee to enjoy the thing will exist; if it unless it is a vain hope
use of the thing leased. Other contract stipulations does not, there is no (Art. 1461 Sale of a
unrelated to this — for in tance the ri ht of r t contract vain hope or
refusal — cannot be presumed included in the expectancy is void)
implied contract renewal. The law itself limits the Uncertainty is with Uncertainty is with
terms that are included in implied renewals. One regard to the quantity regard to the existence
cannot simply presume that all conditions in the and quality of the thing of the thing
original contract are also revived; after all, a contract and not the existence
is based on the meeting of the minds between of the thing
parties. (Spouses Manas v Nicolasora, G.R. No.
Object is a future Object is a present
208845, February 3, 2020).
thing, which must be thing which is the hope
determinate or specific or expectancy
(not generic)
SUBJECT MATTER OF SALE
E.g. growing crops E.g., lottery ticket
(Villanueva & Tiansay, Law on Sales, 67-68, 2016)
b. Requisites of a valid subject
matter (Arts. 1459-1465) 2. Licit
• Not outside the commerce of man (Art. 1459)
1. Existing and future things
• If illicit, contract is void
2. Licit
• Sale declared illegal by law (i.e., narcotics, wild
3. Determinate or Determinable
birds and mammals, rare wild plants, etc.)
If requisite not present, resulting contract is
Prohibited:
VOID.
(a) Narcotics (RA 6425);
(b) Wild Birds or mammals (R.A. No. 2590); rare
1. Existing and future things
wild plants (R.A. No. 3983); poisonous plants
Existing, having potential of existence, future, or
or fruits (R.A. No. 1288); dynamited fish (R.A.
contingent (Arts. 1347, 1348, 1462)
428);
(a) Existing goods – goods owned or possessed
(c) Gunpowder and explosives (Act No. 2255);
by the seller at the time of perfection
and firearms and ammunitions (P.D. No, 9);
(b) Future goods – goods to be manufactured,
(d) Sale of land by non-Christians (Sec. 145,
raise, or acquired by the seller after the
Administrative Code of 1987)
perfection of the contract (forward contracts)
(e) Animals with contagious diseases (Art. 1575)
(f) Sale of animals unfit for the use or service for
Whether the subject matter is of a type and nature
which they were acquired (Art. 1575)
that exists or could be made to exist to allow the
(g) Sale of future inheritance and other rights that
seller reasonable certainty of being able to comply
are not transmissible (Art. 1347)
with his obligations.
3. Determinate or Determinable
Minimum requirement of potential existence: taking
into consideration the state of science and
Determinate: always specific
technology at the time of perfection of the contract.
• particularly designated or physically segregated
from all others of the same class; (Art. 1460)
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Determinable: always generic such price as the value of the subject matter he
• Thing is capable of being made determinate obligates himself to deliver. (Test of intention)
(Capacity to Segregate Test) (Rongavilla v. CA, G.R No. 83974, 1998)
• Without the necessity of a new or further contract
between the parties (No Further Agreement Effect Where Price is Simulated
Test). (Art. 1460) i. The act may be shown to have been in reality a
donation, or some other act or contract. (Art.
NOTE: Subject matter CANNOT be DETERMINED 1471)
BY a 3rd PARTY. (Villanueva & Tiansay, Law on ii. If not, and neither party had any intention
Sales, 102, 2016) whatsoever that the amount will be paid
(absolutely simulated): the sale is void
When subject matter is a right: It must be (Rongavilla v. CA, G.R. No. 83974, 1998)
transmissible. (Art. 1311) iii. If there is a real price but what is stated in the
• Future inheritance cannot be sold (Art. 1347) contract is not the one intended to be paid (only
• Service cannot be sold (Art. 1348) relatively simulated or what is called a
“False Price”): the ostensible contract of sale
Quantity of subject matter is not essential for is valid but subject to reformation. (Macapagal
perfection, but quantity is essential if it goes into the v. Remorin, G.R. No. 158380, 2005)
determinability of the subject matter and the price or
consideration in the contract; Determine the nature 2. In money or its equivalent
and quality of subject matter (National Grains Consideration for a valid contract of sale can be the
Authority v. IAC, G.R. No. 74470, 1989) price and other valuable consideration; at the very
least, a true contract of sale must have price, which
Generic things may be the object of a sale, but the consist of valuable consideration (i.e., something
obligation to deliver the subject matter can only be that can be quantifiable by pesos and centavos) as
complied with when the subject matter has been part of its consideration (Test of value
made determinate (either by physical segregation or consideration). (Republic v. Phil. Resources Dev.,
particular designation) (Yu Tek & Co. v. Gonzales, G.R. No. L-10141, 1958)
G.R. No. L-9935, 1915)
3. Certain or ascertainable
PRICE
Certain: expressed and agreed in terms of specific
Price pesos and/or centavos (Art. 1469)
The sum stipulated as the equivalent of the thing
sold and also every incident taken into consideration Ascertainable:
for the fixing of the price, put to the debit of the i. Set by third persons (Art. 1469)
vendee and agreed to by him. (Inchausti & Co. v. ii. Set by the courts – only in cases where the
Cromwell, G.R. No. L-6584, 1991) third person designated to fix the price, fixes
the same in bad faith or by mistake (Art. 1469)
NOTE: Sale is valid when consideration is partly in iii. Set by reference to a definite day, particular
money and partly in another thing. (Art. 1468). exchange or market (Art. 1472)
iv. Set by reference to another thing certain (Art.
c. Requisites for a valid price (ReM-C) 1472)
v. But never by only one party to the contract of
1. Real sale as it amounts to a potestative condition
2. In Money or its equivalent (unless the price is accepted by the other party)
3. Certain or ascertainable (Francisco v. (Art. 1473)
Desierto, G.R. No. 154117, 2009)
NOTE: When the 3rd party is unwilling to set the
1. Real, not simulated price, the parties may not ask the court to fix the
When at the perfection of the contract of sale, there price because the condition imposed on the contract
is every intention on the buyer to pay the price, and has not happened yet and thus, no enforceable
every expectation on the part of the seller to receive contract has arisen. (Art. 1474)
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better price can be obtained, the contract of sale

IF PRICE IS NEITHER CERTAIN NOR is void. (Bie v. CA, G.R. No. L-17294, 1965)
ASCERTAINABLE: The contract of sale is
inefficacious (Art. 1474). NOTE: If there was a failure of the contract to set a
price but the buyer has already appropriated it,
Effect of Non-Payment of Price then the buyer must pay a reasonable price. (Art.
Non-payment of price does not cancel or avoid the 1474)
sale, as the sale is still considered perfected. But it
is a cause for either: MANNER OF PAYMENT MUST BE AGREED
(a) Specific performance or UPON
(b) Rescission. (Heirs of Escanlar v. CA, G.R. No. The manner of payment must be agreed upon.
119777, 1997) (Marnelego v. Banco Filipino Savings and Mortgage
Bank, G.R. No. 161524, 2006)
HOW PRICE IS DETERMINED
Price is determined by the contracting parties. (Art. It is an essential ingredient before a valid and
1473) binding contract of sale can be said to exist,
because it is part of the prestation of the contract.
INADEQUACY OF PRICE (Sps. Navarra v. Planters Development Bank, G.R.
No. 172674, 2007)
Effect of Gross Inadequacy of Price
General Rule: Mere inadequacy of the price does EARNEST v. OPTION MONEY
not affect the validity of the sale. (Bautista v. CA,
G.R. No. 158015, 2004) Earnest Money (Art. 1482)
• Money given as part of purchase price
Exceptions: • Acceptance is the proof that contract of sale
1. When there is fraud, mistake, or undue exists
influence indicative of a defect in consent • Nothing in law prevents parties from treating
thereby making the contract voidable. (Art. earnest money differently
1470)
Absent proof of a clear agreement to the contrary, it
NOTE: Art. 1456 of the CIVIL CODE provides that a is intended to be forfeited if the sale does not
person acquiring a property through fraud becomes happen without the seller's fault. The potential buyer
an implied trustee of the property’s true and lawful bears the burden of proving that the earnest money
owner. This case involved constructive trust. The was intended other than as part of the purchase
action for reconveyance of the title to the rightful price and to be forfeited if the sale does not occur
owner prescribes in 10 years from the issuance of without the fault of the seller. (Racelis v. Spouses
the title. This ten-year prescriptive period begins to Javier, G.R. No. 189609, January 29, 2018).
run from the date the adverse party repudiates the
implied trust, which repudiation takes place when Qualification: if old concept is stipulated – valid
the adverse party registers the land. (Spouses • Presumption of perfection of contract of sale
Aboitiz v. Spouses Po, G.R. Nos. 208450 & 208497, and such earnest money as part of purchase
2017) price is disputable
2. When it shows that the parties really intended a Option Money Distinguished from Earnest
donation or some other act or contract thereby Money
making the contract of sale void but may be OPTION MONEY EARNEST MONEY
valid as a contract of donation or some other Given as distinct Given as part of the
contract. (Art. 1470) consideration for an purchase price
3. In Judicial Sale, where the inadequacy is option contract
shocking to the conscience of man (Pascua v. Applies to a sale that is Applies when there is
Heirs of Simeon, G.R. No. L-47717, 1988) and not perfected while the already a sale
there is showing that, in the event of resale, a option is not exercised
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When given, the option When given, buyer is Rules Governing Auction Sales
holder is not required bound to pay the • Sale is perfected by the fall of the hammer
to exercise the option balance • Seller has the right to bid at the auction provided
(either to buy or sell). such right was reserved and notice was given
(Oesmer v. Paraiso Development Corporation, G.R. to that effect. (Art. 1476)
No. 157493, 2007)
In bidding contracts, the award of the contract to the
bidder is an acceptance of the bidder's offer. Its
2. PERFECTION OF SALES
effect is to perfect a contract between the bidder and
General Rule: A contract of sale is perfected at the the contractor upon notice of the award to the
moment there is a meeting of the minds upon the bidder. Failure to sign the physical contract does not
thing which is the object of the contract and upon the affect the contract's existence or the obligations
price; consensual contract (Art. 1475) arising. (Metro Rail Transit Development Corp v.
Gammon Phil, G.R. No. 200401, 2018.)
Exception: When the sale is subject to a
suspensive condition. (People’s Homesite v. CA, 3. CONTRACT OF SALE V.
G.R. No. L-61623, 1984) CONTRACT TO SELL
REQUIREMENTS FOR PERFECTION OF A CONTRACT OF CONTRACT TO SELL

SALE SALE
1. When parties are face to face – when there is TRANSFER OF TITLE
absolute acceptance of an offer that is certain Title passes to the Ownership is reserved in
buyer upon delivery the seller and shall not
2. When thru correspondence or telegram –
of the thing sold (Art. pass to the purchaser
when the offeror receives or had knowledge of
1477) until fulfillment of certain
the acceptance (Art. 1319) conditions, such as full
3. When the sale is subject to a suspensive payment of the purchase
condition – from the moment the condition is price. (Art. 1478)
fulfilled (People’s Homesite v. CA, G.R. No. L- OWNERSHIP OF THE SELLER
61623, 1984) The seller has lost Title remains in the seller
and cannot recover if the buyer does not
NOTE: Qualified acceptance is a mere counteroffer ownership of the comply with the condition
which needs to be absolutely accepted to give rise thing sold and precedent, which
to perfected contract of sale. (Art. 1319; Manila delivered (Arts. payment of the price at
1477, 1496) until the time specified in the
Metal Container v. PNB, G.R. No. 166862, 2006)
and unless the contract. (Tuazon v.
contract of sale itself Garilao, G.R. No.
Business ads are mere invitations to make an offer is resolved and set 143673, 2001)
except when it appears to be otherwise. (Art. 1325) aside.
NOTE: It must be
A contract of sale is a consensual contract. Under stipulated that ownership
Article 1475 of the Civil Code, the contract of sale is in the thing shall not pass
perfected at the moment there is a meeting of minds to the buyer until full
upon the thing which is the object of the contract and payment of the price. (Art.
upon the price. Based on the testimony of the heir 1478)
of Y, there was no meeting of the minds regarding PAYMENT OF THE PRICE
the sale of the property as X did not offer the lot for Non-payment of the Full payment of the price
sale, and the heirs of Y never consented to any such price is a negative is a positive suspensive
purchase. The heirs were simply summoned and resolutory condition. condition, the failure of
were handed the Deed of Absolute Sale by their (Art. 1179) which is not a breach of
grandmother without any agreement as regards the contract but simply an
sale of any property. (Uy v. Heirs of Uy-Renales, event that prevents the
G.R. No. 227460, December 05, 2019) obligation of the seller to
convey title to the buyer.
(Uy& Sons, Inc. v.
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Valbueco Inc., G.R. No. When one of the parties is incapable of giving
179594, 2013) consent, the contract of sale is voidable (Art.
1390), subject to annulment or ratification. (Art.
The non-payment of the
1393)
purchase price renders
the contract to sell without
force and effect. (Tumibay 1. ABSOLUTE INCAPACITY
v. Lopez, G.R. No.
171692, 2013) Parties Disqualified to Enter into Sale
REMEDIES Contract:
Specific Specific performance 1. Minors (Art. 1327)
performance or cannot be availed of when
2. Insane and Demented Persons (Art. 1327)
rescission under the contract to sell has
Articles 1191, 1592, been cancelled due to the 3. Deaf-Mutes who do not know how to write
and 1593. non-payment of the (Art. 1327)
purchase price. The buyer Also includes state of drunkenness and
cannot demand the seller hypnotic spell (Art. 1328)
to convey title when such
buyer did not pay the GR: Status of Contract: Voidable, BUT it is
price, and the seller
subject to annulment or ratification.
cannot demand the buyer
to pay the price, since
failure to pay resulted in Exception: Where necessaries are sold and
the cancellation of the delivered to minors or other persons without
contract to sell. (Pilipino capacity to act, he must still pay a reasonable
Telephone Corporation v. price therefore, thus, the resulting contract is valid
Radiomarine Network
and not voidable. (Art. 1489)
Phils. Inc., G.R. No.
160322, 2011)
2. RELATIVE INCAPACITY
Remedy of rescission is
not available because the 1. Spouses - A spouse may, without the consent
breach contemplated in of the other spouse, enter into sales transactions
rescission of contracts is in the regular pursuit of their profession, vocation,
the obligor’s failure to
comply with an obligation
or trade. (Family Code, Arts. 73, 96, 124)
already extant, not a
failure of a condition to General Rule: The husband and the wife cannot
render binding that sell property to each other. The contract is void.
obligation. A non-existent There is no transfer of ownership, thus the
obligation cannot be creditors may go after the property. (Modina v.
subject of rescission.
CA, G.R. No. 109355, 1999)
(Diego v. Diego, G.R. No.
179965, 2013)
(De Leon, Comments and Cases on Sales and Exceptions:
Lease, 21-23, 2014) (a) When a separation of property was agreed
upon in the marriage settlement (Art. 1490)
(b) When there has been a judicial separation
B. CAPACITY TO BUY OR SELL of property under Art. 191 (Art. 1490)
CAPACITY OF PARTIES NOTE: Prohibition likewise applies to common-

General rule: All persons who are authorized in law spouses (Matabuena v. Cervantes, G.R. No.
this Code to obligate themselves may enter into a L-28771, 1971)
contract of sale (Art. 1489); as long as these
persons are with civil capacity. New doctrine: A sale made by a husband without
the consent of the wife is merely voidable. It cannot
be a void contract since it is not a matter of "lack of
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consent," which gives rise to a "no contract"

situation under Article 1318 of the Civil Code. Two groups of parties prohibited from
Neither it is mentioned as a void contract under acquiring by purchase certain properties:
Article 1409 of the Civil Code. Article 173 reveals the
(GAAE - PEJJOL) (Art. 1491)
legislative intent to make such contracts as valid
until annulled. (Spouses Cueno v. Spouses
Bautista, G.R. No. 246445, March 2, 2021) 1. Guardian/Agent/Executors and
Administrators
• Direct or indirect
Q: Spouses X and Y, married prior the effectivity • May be “ratified” since only private
of the Family Code, are owners of a pro-indiviso
wrong is involved, i.e., really in the
share of a parcel of land. This property belonged
to the conjugal partnership. Subsequently, form of entering into a new contract
husband X sold his and Y’s share of the lot to
their other co-owner K (Y’s father) without his 2. Public Officers and Employees/ Justices
wife’s consent. K in turn sold the subject and Judges/ Officers of Court/ Lawyers
property to Spouses L and M. After more than 40 • Cannot be ratified since public wrong
years from the sale to K, Spouses X and Y filed
is involved
a complaint for recovery of the subject property
on the ground that the sale to their co-owner K
was void since the wife’s consent was lacking. Requisites for the prohibition to apply to
Was the sale of the husband without the wife’s attorneys and their clients’ properties:
consent of a conjugal property void? 1. Existence of attorney client relationship;
A: No. The sale is voidable. Articles 166 in relation 2. Property is the subject matter in litigation;
to Article 173 of the Civil Code will apply since the
3. While in litigation (from filing of complaint to
subject property belonged to the conjugal
partnership of spouses X and Y and was acquired in final judgment)
1963 during the effectivity of the Civil Code. Article
166 provides that “… the husband cannot alienate NOTE: Exception to the prohibition against
or encumber any real property of the conjugal attorneys: contingent fee arrangement where
partnership without the wife's consent…” Article the amount of legal fees is based on a value of
173 on the other hand provides that “the wife may, property involved in litigation (rationale: the
during the marriage and within ten years from the
transaction questioned ask the courts for the
transfer or assignment of the property takes effect
annulment of any contract of the husband entered only after the finality of a favorable judgment and
into without her consent…” is always subject to supervision by the court)
Previously the Court had conflicting views on the (Fabillo v. IAC, G.R. No. L-68838, 1991)
status of a sale made by a husband without the
consent of the wife under the Civil Code. Now the Legal Status of Contract
Court adopts the view that transactions of such
nature are merely voidable. It cannot be a void
contract since it is not a matter of "lack of Void (case law) – guardian/executor/public
consent," which gives rise to a "no contract" officers/officers of the court. (Rubias v. Batiller,
situation under Article 1318 of the Civil Code. G.R. No. L-35702, 1973)
Neither it is mentioned as a void contract under
Article 1409 of the Civil Code. Article 173 reveals Unenforceable (civil code) – agent; VALID if with
the legislative intent to make such contracts as consent (Art. 1491)
valid until annulled.
A contract is voidable if the consent is vitiated by
lack of legal capacity of one of the contracting SPECIAL DISQUALIFICATIONS
parties. It may be ratified and may be barred by Any others specially disqualified by law (Art. 1491
prescription. Here, the sale was questioned after [6])
more than ten years. Therefore, the sale which was
initially voidable cannot be questioned. (Spouses NOTE: These contracts are void for public policy.
Cueno v. Spouses Bautista, G.R. No. 246445,
They cannot be ratified neither can the right to set
March 2, 2021)
up the defense of illegality be waived. (Rubias v.
2. Others - Trust Relationships Batiller, G.R. No. L-35702, 1973)
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C. EFFECTS OF THE CONTRACT WHEN 1. OBJECTS THAT THE VENDOR HAS

THE THING SOLD HAS BEEN LOST TO DELIVER: (THI-F-A)
GENERAL RULE 1. The thing sold (Art. 1495)

Legal consequences from point of perfection are the 2. Fruits, belong to the buyer from the day the
same in both legal systems: upon perfection of an contract of sale is perfected (Art. 1537)
unconditional contract of sale involving specific or 3. Accessions and accessories, in the condition in
determinate subject matter, the risk of loss which they were upon the perfection of the sale
deterioration and the benefits of fruits and (Art. 1537)
improvements, were for the account of the buyer.
2. OBLIGATIONS OF THE VENDOR
If the subject matter is generic, simply replace item.
(Art. 1263) 1. Preserve the subject matter – proper diligence
of a good father of a family unless law or parties
WHO BEARS RISK OF LOSS/ DETERIORATION/ stipulate another standard (Art. 1163)
FRUITS BEFORE PERFECTION 2. Deliver – transfer ownership and deliver object
• Res perit domino (Art. 1495)
• The seller is the owner, so he bears risk of loss. 3. Deliver fruits and accessories existing from the
(Art. 1504) time of perfection (Arts. 1164, 1166, 1537)
4. Warrant subject matter against eviction and
WHO BEARS RISK OF LOSS/ hidden defects (Arts. 1546-1581)
DETERIORATION/FRUITS AT PERFECTION
• Res perit domino General Rule: Seller need not be the owner of the
• Contract is merely inefficacious because loss of subject matter at the time of perfection: sufficient
the subject matter does not affect the validity of that he is the owner at the time of delivery. (Art.
the sale 1459)
• Seller cannot anymore comply with obligation
so buyer cannot anymore be compelled to pay Exception: Foreclosure sale (mortgagor must be
the price. (Arts. 1493, 1494) absolute owner) (Art. 2085)
WHO BEARS RISK OF LOSS/ DETERIORATION/ NOTE: A perfected contract of sale cannot be
FRUITS AFTER PERFECTION BUT BEFORE challenged on the ground of the seller’s non-
DELIVERY ownership of the thing sold at the time of the
• Loss – confused state perfection of the contract. It is at delivery that the law
o Paras: BUYER requires the seller to have right to transfer
o Tolentino: SELLER ownership of the thing sold. (Cavite Development
• Deterioration and fruits - Buyer bears loss and Bank v. Sps. Lim, G.R. No. 131679, 2000)
claims the fruits. (Art. 1538, 1189)
DELIVERY OF SUBJECT MATTER
AFTER DELIVERY
• Res perit domino Delivery- “the absolute giving-up of the control and
• Delivery extinguishes ownership of the seller custody of the property on the part of the vendor,
and creates a new one in favor of the buyer and, and the assumption of the same by the vendee”
therefore, buyer bears risk of loss. (Art. 1504) (Equatorial Realty Dev. v. Mayfair Theater, G.R. No.
133879, 2001)
D. OBLIGATIONS OF VENDOR
Two Types of Delivery:
Obligation of the Vendor 1. Actual - physical delivery
The vendor (seller) is bound to transfer the 2. Constructive
ownership of and deliver, as well as warrant the a. Execution of Public Instrument (Art. 1498)
thing which is the object of the sale. (Art. 1495) only produces the effect of delivery when:
i. The thing sold is subject to control of seller
at the time of execution of instrument.
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(Addison v. Felix, G.R. No. L-12342, 2. Contrary is provided for in recording laws
1918); and (Art. 1505; P.D. 1529)
ii. Such control should remain for a 3. Sale is made under statutory power of sale
reasonable period after execution of the or under order of a court of competent
Instrument. (Power Commercial and jurisdiction (Art. 1505)
Industrial Corp. v. CA, G.R. No. 119745, 4. Sale is made in a merchant’s store in
1997) accordance with code of commerce and
b. Constitutum Possessorium (Art. 1500) – the special laws. (Art. 1505)
seller held possession of the subject matter
(real property) in the concept of owner, and 2. Title as to Movable Properties
pursuant to the sale, the seller continues to
hold physical possession but no longer in the General Rule: Possession is equivalent to title
concept of the owner (owner to lessee) (Art. 559)
c. Traditio Brevi Manu – the would-be buyer was
already in the possession (i.e., as lessee) of Requisites:(PG)
the subject matter (real property) and 1. Possession of movable
pursuant to the sale, he would now hold 2. Made in Good faith (Art. 559)
possession as owner
d. Traditio Longa Manu – delivery by mere Exceptions:
consent or agreement. 1. Owner lost movable – owner can recover
by reimbursing price, including those
The essential requisites of a contract under Article acquired in public sale or auction, provided
1318 of the New Civil Code are: (1) consent of the in good faith (not a fencer) (Art. 559)
contracting parties; (2) object certain which is the 2. Owner is unlawfully deprived (stolen or
subject matter of the contract; and (3) cause of the delivered without intention of
obligation which is established. Thus, contracts, transferring title) – owner can recover w/o
other than real contracts are perfected by mere
reimbursing price (Art. 559)
consent which is manifested by the meeting of the
offer and the acceptance upon the thing and the 3. Bought in a merchant store – owner cannot
cause which are to constitute the contract. recover even if unlawfully deprived (Art.
Furthermore, under Article 1475 of the Civil Code, 1505)
from the moment of perfection of the sale, the
parties may reciprocally demand performance, even Exceptions to the Exceptions:
when the parties have not affixed their signatures to 1. Movable is bought at public sale – owner
the written form of such sale. Consequently, the can only recover after reimbursing price
actual delivery of the subject matter or payment of 2. Acquired in good faith and for value from
the price agreed upon are not necessary auction
components to establish the existence of a valid
sale; and their non-performance do not also
invalidate or render "void" a sale that has begun to SALE BY NON-OWNER OR BY ONE HAVING
exist as a valid contract at perfection. (Selerio v. VOIDABLE TITLE
Bancasan, G.R. No. 222442, June 23, 2020)
1. Perfection Stage
SALE BY A PERSON NOT THE OWNER AT THE • Sale by owner – VALID
TIME OF DELIVERY (Arts. 1462, 1505, 1459) • Sale by non-owner – VALID (Arts. 1459,
1475)
1. Rules on Legal Effects of Sale by a Non-owner
Reason why both sales are valid: ownership is
General Rule: If sale is by a non-owner, buyer necessary only at time of delivery; at perfection
acquires no better title than seller had. (Art. 1505) stage, no obligation on part of seller to transfer
ownership (Villanueva, Law on Sales, 294, 2016)
Exceptions:
1. Owner by his conduct is precluded from Law on estoppel further bolsters it: title passes by
denying seller’s authority (Estoppel) (Art. operation of law to grantee when person who is not
1434)
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owner of the goods sold delivers it and later on SALE BY SELLER WITH VOIDABLE TITLE IN
acquires title thereto (Art. 1434) GOOD FAITH and WITHOUT NOTICE OF THE
DEFECT
Since valid, action to annul is improper; there is
already a perfected contract. 1. Perfection stage
Valid sale – buyer acquires title of goods
2. Consummation Stage
Contract of sale is valid because it has passed 2. Consummation stage
perfected stage, despite seller not being the owner Valid sale – if title has not yet been avoided, buyer
or seller having no authority to sell becomes owner of the goods under the condition
• What is void is the transfer of title -- ownership that the sale:
did not pass a. was made in good faith
• Effect: buyer acquired no better right than b. is for value
transferor (Art. 1505) c. is without notice of seller’s defect of title (Art.
• Legal effect: CAVEAT EMPTOR – BUYER 1506)
BEWARE but Buyer always has cause of action
against the Seller
E. OBLIGATIONS OF VENDEE
SALE OF CO-OWNER OF WHOLE PROPERTY
OR DEFINITE PORTION There is real or actual delivery of the thing sold
when it is placed in the control and possession of
General Rule: the vendee. (Art. 1497)
1. Co-owner sells whole property prior to
partition – sale of property itself is void but Obligations of Vendee (Buyer)
valid as to his spiritual share (Panganiban v.
Oamil, G.R. No. 149313, 2008) 1. Pay the price
2. Co-owner sells definite portion prior to Buyer is obligated to pay the price according to
partition – sale is void as to other co-owner but the terms agreed upon regarding time, place and
valid as to his spiritual share if the buyer would amount (Art. 1582)
have still bought such spiritual share had he i. If payment of interest is stipulated – must
known that he would not acquire the definite pay; if amount of interest not mentioned
portion sold. (Lopez v. Cuaycong, G.R. No. L- – apply legal rate
46079, 1944)
ii. When buyer defaults – constitutes
breach; subject to specific
Exceptions to the rule on the effect of sale of a
performance/rescission and damages;
definite portion by a co-owner
1. Subject matter is indivisible in nature or by
interest to be paid also from default
intent, hence, entire sale is void; (Mindanao
Academy, Inc. v. Yap, G.R. No. L-17681, 1965) The full payment of the purchase price is the buyer's
prestation. The non-payment of the purchase price
2. Sale of a particular portion of a property is with
by the buyer after the seller has delivered the object
consent of other co-owners, sale of entire of the sale to the buyer constitutes a breach of the
property is valid; (Pamplona v. Moreto, G.R. buyer's prestation in a contract of sale. The buyer
No. L-33187, 1980) has contravened the very tenor of the contract.
3. Co-owner sells 1 of 2 commonly owned lands (Nuñez et al. v. Moises-Palma, G.R. No. 224466,
and does not turn over ½ of the proceeds, other March 27, 2019)
co-owner, by law and equity, has exclusive
claim over remaining land. (Imperial v. CA, 2. Accept delivery of thing sold
G.R. No. 102037, 1996) Where to accept:
(a) at time and place stipulated in the contract
(b) if none specified – at the time and place of
delivery goods (Art. 1582)
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There is acceptance when: maintain an action for the price, i.e.,

(a) He intimates to seller that he has accepted specific performance.(Art. 1595)
(b) When delivered and buyer does any act
inconsistent with ownership of seller (c) When price is Payable on Certain Day and
(c) Retains without intimating to seller that he Buyer Fails to Pay on the Day Set – the seller
has rejected (Art. 1585) can maintain action for the price, i.e., specific
performance (Art. 1595)
3. Sale of Goods on installment
NOTE: Read Articles 1595-1596 of the Civil Code
Goods must be delivered in full, except when
stipulated (Art. 1583)
UNPAID SELLER
When not examined by buyer – not accepted until A seller of the goods is deemed to be an unpaid
examined or at least had reasonable time to seller either:
examine (Art. 1584) (a) When the whole of the price has not been paid
or tendered; or
Acceptance of goods in general, absent contrary (b) When the seller received bill of exchange or
express stipulation, does not discharge seller negotiable instrument as a condition for
from liability in case of breach of warranties payment and the condition has been broken by
(unless no notice or failure to give it within reason of the dishonor of instrument, the
reasonable time) (Art. 1586) insolvency of the buyer, or otherwise. (Art.
1592)
When buyer has a right to refuse goods, no need
to return; shall be considered as depositary; Requisites of Unpaid Seller: (PUG)
unless there is stipulation to the contrary (Art. 1. Physical possession is with seller
1587) 2. Seller is Unpaid
3. Subject matter – Goods
F. BREACH OF CONTRACT
Special remedies of unpaid seller: (PSRR)
1. REMEDIES 1. Possessory lien
2. Stoppage in Transitu
a. Remedies of seller in case of 3. Special right of Re-sale
movables 4. Special right to Rescind (Art. 1526)
General Remedies: NOTE: Hierarchical Application – only when unpaid

1. Specific Performance with damages; OR seller has exercised possessory lien or stoppage in
2. Rescission with damages transitu can the seller proceed with his other special
rights of resale or to rescind. (Villanueva & Tiansay,
(a) When ownership is transferred to the buyer – Law on Sales, 335, 2016)
the seller may maintain an action against him
for the price of the goods, i.e., specific 1. Possessory lien
performance (Art. 1595) Seller is not bound to deliver if buyer has not paid
him the price. (Art. 1524)
(b) When there is no transfer of ownership to the
buyer Right to retain cannot be availed when seller does
i. If the goods can be resold for a not have custody (Art. 1526)
reasonable price – seller may resell • Exercisable only in following
ii. If the goods cannot be resold – the seller circumstances:(CCI)
can deliver the goods and if buyer (a) Goods sold without stipulation as to
refuses, then the seller may notify the Credit
buyer that the same is being held by the (b) Goods sold on Credit but term of credit
seller as bailee for the buyer then has expired
(c) Buyer becomes Insolvent (Art. 1527)
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• When part of goods delivered, may still

exercise right on goods undelivered Why ‘special’? There are things which seller
cannot do in ordinary sale:
Instances when possessory lien is lost: 1. Ownership is with buyer but seller can sell
1. Seller delivers goods to carrier for transmission goods
to buyer without reserving ownership in goods 2. Title accorded to buyer is destroyed even
or right to possess them without court intervention (Villanueva &
2. Buyer or his agent lawfully obtains possession Tiansay, Law on Sales, 342, 2016)
of goods
3. Waiver (Art. 1529) NOTE: In ordinary sale, need to go to court to
4. When he parts with goods (still has stoppage in destroy transfer of ownership.
transitu)
4. Special Right to Rescind
NOTE: Notice by seller to buyer not essential
Can be exercised under the following instances:
2. Stoppage in transitu 1. Expressly stipulated
• Goods are in transit 2. Buyer is in default for unreasonable time (Art.
• Remedy is available only when buyer is 1534)
insolvent (Art. 1526)
NOTE: Notice needed to be given by seller to buyer.
Requisites when goods are in transit (DR)
1. From the time goods are Delivered to carrier for b. Remedies of seller in case of sale
purpose of transmission to buyer of immovables
2. Goods Rejected by buyer and carrier continues
to possess them (Art. 1531) General Remedies
1. Specific Performance with damages; or
When goods no longer in transit 2. Rescission with damages
(a) Reached point of destination;
(b) Before reaching destination, buyer or his agent Q: What are the remedies of an unpaid seller
obtains delivery of the goods; involving a real property as the subject matter,
(c) Goods are supposed to have been delivered to not covered by the Maceda Law?
A: 1. To compel specific performance by filing an
buyer but carrier refused;
action against the buyer for the agreed purchase
(d) Bailee or carrier acknowledges that he is price; or
holding the goods for the buyer or his agent. 2. To rescind or resolve the contract of sale either
(Art. 1531) judicially or by a notarial act; and
3. In either (1) or (2), to recover damages for the
How is right exercised breach of the contract.
1. Obtain actual possession of goods (Nuñez et al. v. Moises-Palma, G.R. No. 224466,
2. Give notice of claim to carrier/bailee in March 27, 2019)
possession thereof
Anticipatory Breach
NOTE: Notice by seller to buyer is not required; 1. Seller has reasonable grounds to fear loss of
notice to carrier is what is essential (Art. 1532) immovable sold and its price, sue for
Rescission
3. Special Right to Resell the Goods 2. Non–payment of price, sue for Rescission (Art.
Can be exercised under the following instances: 1591)
(a) Goods are perishable;
(b) Stipulated the right of resale in case buyer c. Remedies of buyer
defaults in payment;
(c) Buyer in default on payment of price for Suspension of Payment
unreasonable time. (Art. 1533) General Rule: Buyer may suspend payment in
case:
NOTE: Notice by seller to buyer not essential
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1. He is disturbed in the possession or ownership 3. Foreclose the chattel mortgage, if one is

of the thing acquired; constituted, should the buyer’s failure to pay
2. He has reasonable grounds to fear such cover two or more installments (Art. 1484)
disturbance. (Art. 1590)
NOTE: This also applies to contracts purporting to
Exception: No right to suspension of payment if the be leases of personal property with option to buy,
seller gives security for the return of the price. (Art. when the lessor has deprived the lessee of the
1590) possession or enjoyment. (Art. 1485)
Sale on installment: Payment by several partial
In case of subdivision or condominium projects, the payments (two or more) in small amount (Levy
buyer may rescind the contract or suspend payment Hermanos, Inc. v. Gervacio, G.R. No. L-46306,
if real estate developer fails to comply with 1939)
obligation according to approved plan. (P.D. 957,
Sec. 23) Rationale of the law: Buyer is lulled into thinking
that he could afford because of small amounts per
installment and at the same time to remedy abuse
2. RECTO LAW AND MACEDA LAW of commercial houses. (Manila Trading and Supply
Co. v. Reyes, G.R. No. L-43263, 1935)
a. Recto Law: Sale of movables
on installment (Arts. 1484- Nature of remedies: Alternative, not cumulative
1486) (Nonato v. IAC, G.R. No. L-67181, 1985)
Coverage: Sale on installment (two or more The fact that the seller did not foreclose the chattel
installments required) and financing transaction mortgage constituted on the movable purchased on
(Equitable Savings Bank v. Palces, G.R. No. credit, but opted specific performance, with a plea
214752, 2016) on movable property and contracts for a writ of replevin, does not amount to a
of lease of movable property with option to purchase foreclosure of the chattel mortgage to be covered by
(PCI Leasing and Finance v. Giraffe-X Creative Art. 1484. (Tajanglangit v. Southern Motors, G.R.
Imaging, G.R. No. 142618, 2007) No. L-10789, 1957)
Contract to sell is not covered. (Visayan Sawmill Co. REMEDIES are NOT CUMULATIVE but are
v. CA, G.R. No. 83851, 1993). ALTERNATIVE and EXCLUSIVE
Rule on Forfeiture of Partial Payments in a 1. Specific Performance

Contract to Sell General Rule: Once chosen, can no longer rescind
In a contract to sell, the forfeiture of partial payments nor foreclose mortgage.
may only be valid if there is a stipulation to that
effect, subject to payments of reasonable rents. In a Exception: After choosing specific performance but
contract to sell, failure to fully pay the purchase price the same becomes impossible, rescission may be
results in the cancellation of the contract, and the pursued subsequently. (Villanueva & Tiansay, Law
parties shall stand as if the obligation to sell never on Sales, 352-353, 2016
existed." (Spouses Godinez v. Spouses Norman,
GR No. 225449, February 26, 2020, citing Olivarez 2. Rescission
Realty Corporation v. Castillo) When chosen, there is a correlative obligation to
restitute.
Remedies available under the Recto Law:
In a sale of personal property, the price of which is Stipulations that installments paid are forfeited are
payable in installments, the seller may exercise the valid if not unconscionable.
following remedies: (REF)
1. Exact fulfillment of the obligation, should the Deemed chosen when:
buyer fail to pay any installment; 1. Notice of rescission is sent;
2. Rescind the sale, should the buyer’s failure to 2. Takes possession of subject matter of sale;
pay cover two or more installments; 3. Files action for rescission;
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4. Barring effect on recovery of balance. Rights of the Buyer under Maceda Law with at
(Villanueva & Tiansay, Law on Sales, 353-356, least two (2) years of Installment: (R.A. 6552,
2016) Sec. 3)
1. To pay, without additional interest, the unpaid
3. Foreclosure installments due within the total grace period
Once there has been foreclosure sale, the seller can earned by him. Said grace period is fixed at the
no longer claim for remaining balance on the rate of one-month grace period for every one
purchase price. (Northern Motors v. Sapinoso, G.R. year of installments payments made. Thus,
No. L-28074, 1970) here the buyer has at least two months grace
period for he should have paid at least two
GR: When foreclosure is chosen, seller can no years of installments to avail of the rights under
longer claim all amounts due from the sale, including this section.
damages and attorney’s fees. (Macondray & Co. v. NOTE: This right can be exercised only once in
Eustaquio, G.R. No. 43683, 1937) every five (5) years of the life of the contract and
its extensions, if any.
E: In case of Perverse Buyer-Mortgagor, if 2. To be refunded the cash surrender value of his
mortgagor refuses to deliver property to effect payments equal to 50% of his total payments if
foreclosure, expenses incurred in recovering the the contract is cancelled. But if he has paid five
property may also be recovered, i.e., attorney’s years or more, he is entitled to an increase of
fees, etc. (Filipinas Investment & Finance Corp. v. 5% every year and so on but the cash surrender
Ridad, G.R. No. L-27645, 1969) value shall not exceed 90% of his total
payments. (McLaughlin v. CA, G.R. No. L-
b. Maceda Law (R.A. 6552) 57552, 1986)
Rationale of the Law The actual cancellation of the contract referred

Public policy to protect buyers of real estate on to above shall take place only:
installment payments against onerous and 1. After 30 days from receipt by the buyer of the
oppressive conditions. notarial notice of cancellation or demand for
rescission, AND
Covered transactions 2. Upon full payment to the buyer of the cash
Applies to all sale of residential real estate on surrender value (R.A. 6552, Sec. 3)
installments including Contracts to Sell and those NOTE: Buyer may update payment during the 30
financed through banking institutions (R.A. 6552, day waiting period which will render the
Sec. 3) cancellation ineffective.
In the computation of the total number of installment
Excluded: payments the following are included:
1. Industrial real estate 1. Down payment and
2. Commercial real estate 2. Deposit or option money (R.A. 6552, Sec. 3)
3. Sale to tenants under agrarian laws (R.A. 6552,
Sec. 3) Rights of the Buyer under Maceda Law with less
than two (2) years of installments: (R.A. 6552,
Requisites of Sec. 3 of Maceda Law: (FReT) Sec. 4)
1. Failure to pay installments was due to reasons, 1. Still has the right to pay within a grace period
other than failure of the developer to develop of not less than sixty (60) days from the date
the subdivision or condominium according to the installment became due.
the approved plan and to comply with such 2. If the buyer fails to pay the installment due at
within the time limit; the expiration of the grace period, i.e. 60 days,
2. Only covers Residential lots including the seller may cancel the contract after 30 days
condominium units, excluding, sales to tenants; from receipt by the buyer of the notice of
3. The buyer has paid at least Two years of cancellation or demand for rescission of the
installments. (R.A. 6552, Sec. 3) contract by a notarial act.
NOTE: Here, the buyer is not entitled to any
refund
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Other rights granted under the Maceda Law: NOTE: If the two contracts involved are not both
(R.A. 6552, Sec. 5 & 6) contracts of sale, as when one is a contract to sell,
1. Sell rights to another; and the other one a contract of sale, Art. 1544 does
2. Assign the same to another person; not apply. This follows the principle that in a contract
3. Reinstate contract by updating during grace to sell, the seller has no obligation to deliver title until
period and before actual cancellation; there is full payment of the purchase price. Thus, for
4. Deed of Sale to be done by notarial act; as long as the condition of full payment has not been
5. To pay in advance any installment or the full fulfilled, a subsequent sale of the same property will
balance of price anytime without interest and be valid since the seller still has title to the property.
have such full payment annotated in certificate With more reason, if the seller in a contract to sell
of title. has defaulted, the breach in the condition entitles
Purpose of the law: Protect buyers in installments the seller to sell the same property for full
against oppressive conditions. Applies to contracts consideration. Even if the buyer in the contract to
even before the law was enacted. (R.A. 6552, Sec. sell annotates his right in the title, the buyer in the
2; Siska Dev. Corp. v. Office of the President, G.R. contract of sale is not in bad faith. (Sps. Domingo v.
No. 93176, 1994) Sps. Manzano, G.R. No. 201883, 2016)
Note that the Court applied this in this case even if
NOTE: Stipulations contrary to the provisions of the buyer in the contract to sell was not in default
Sections 3, 4, 5 and 6 are null and void. (R.A. 6552, since the seller accepted payment after due date.
Sec. 7) Waiver of the required notice is oppressive. Seller however must reimburse payments made to
the buyer even if he has only paid less than 2 years
3. OTHER REMEDIES of installments because he was not in default. Court
distinguished this from earlier case of Abarquez v.
a. Remedies in double sales CA even if in that case, one also involved a contract
to sell – because in Abarquez, the seller already
General Rule: FIRST IN TIME, PRIORITY IN delivered to the buyer who accepted and took
RIGHT (Art. 1544) possession, and even constructed a house on the
land under installment sale. (Sps. Domingo v. Sps.
When general rule does not apply: when not all Manzano, G.R. No. 201883, 2016)
requisites embodied in Art. 1544 concur.
Double Sales Rules according to Art. 1544:
Requisites for Double Sales to Exist (VOCS) 1. Movable
1. That two (or more) sales transactions in the First to possess in good faith shall prevail (Art. 1544)
issue must pertain to exactly the same subject 2. Immovable
matter, and must be valid sales transactions. (a) First to register in good faith shall prevail;
2. That two (or more) buyers at odds over the (b) In case no registration is made, then first to
rightful ownership of the subject matter must possess in good faith shall prevail;
each represent conflicting interests; and (c) No registration and no possession in good
3. That two (or more) buyers at odds over the faith, then the person who presents oldest title
rightful ownership of the subject matter must in good faith, shall prevail. (Art. 1544)
each have bought from the very same seller.
(Spouses German v. Spouses Santuyo, G.R. NOTE: The FIRST BUYER is always in good faith
No. 210845, January 22, 2020) and will always prevail if he registers his sale first.
His good faith is not destroyed by the subsequent
If not all the elements are present for Art. 1544 to knowledge of the second sale. The reason behind
apply, the principle of prior tempore, potior jure or this is that at the time of perfection of his contract of
simply “he who is first in time is preferred in right” sale, he was the only buyer. (Carbonell v. CA, G.R.
should apply. Indisputably, he is a purchaser in good No. L-29972, 1976) But the knowledge gained by
faith because at the time he bought the real the 2nd buyer of the first sale defeats his rights even
property, there was still no sale to as a second if he is first to register, since such knowledge taints
vendee. (Consolidated Rural Bank v. CA, G.R. No. his registration with bad faith. (Ordua v. Fuentebella,
132161, 2005) G.R. No. 176841, 2010)
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Buyer in Good Faith – one who purchases and land is already registered – apply first in time,
pays a fair price for a property without notice that priority in right.
another has an interest or right to it. (Amoguis v.
Ballado, G.R. No. 189626, 2018.) Good faith must concur with registration. To be
entitled to priority, the second purchaser must not
If a land is registered and is covered by a certificate only establish prior recording of his deed, but must
of title, any person may rely on the correctness of have acted in good faith. (Gabriel v. Mabanta, G.R.
the certificate of title. However, this does not apply No. 142403, 2003)
where the party has actual knowledge of facts and
circumstances that would impel a reasonably Under the Torrens system, a sale of property that is
cautious man to make such inquiry or when the not registered under the Torrens system is binding
purchaser has knowledge of a defect or the lack of only between the buyer and the seller and does not
title in his vendor or of sufficient facts to induce a affect innocent third persons. (Evy Construction and
reasonably prudent man to inquire into the status of Development Corp. v. Valiant Roll Forming Sales
the title of the property in litigation. It is incumbent Corp., G.R. No. 207938, 2017)
upon a buyer to prove good faith should he or she
assert this status. (Amoguis v. Ballado, G.R. No. As an exception, “knowledge of an unregistered sale
189626, 2018.) is equivalent to registration.” (Evy Construction and
Development Corp. v. Valiant Roll Forming Sales
Lis pendens – notice that subject matter is in Corp., G.R. No. 207938, 2017)
litigation (Sps. Lim v. Vera Cruz, G.R. No. 143646,
2001) is a form of registration accorded priority right. Requisite Diligence for Buyer in Good Faith:
1. Diligence in verifying the validity of the title of
A buyer cannot be considered a transferee in good the property;
faith if it was aware of the title’s notices of lis 2. Diligence in inquiring into the authority of the
pendens. (Register of Deeds of Negros Occidental transacting spouse to sell conjugal property in
v. Anglo, Sr., G.R. No. 171804, 2015) behalf of the other spouse. (Aggabao v.
Parulan, G.R. No. 165803, 2010).
Adverse claim – notice that somebody is claiming
better right (Gardner v. CA, G.R. No. L-59952, 1984) b. Remedy of rescission in contracts
is a form of registration accorded priority right. covering immovables (Arts. 1191 &
1592)
Possession – both actual and constructive (Roman
Catholic Church v. Pante, G.R. No. 174118, 2012) General Rule: Judicial Rescission (Art. 1191)
Registration – any entry made in the books of the Exception: Extrajudicial Rescission allowed but
registry, including both registration in its ordinary SUBJECT to COURT Confirmation.
and strict sense, and cancellation, annotation, and • Allowed if stipulated; burden to sue shifts to
even marginal notes. It is the entry made in the party who does not like rescission
registry which records solemnly and permanently • Court still has final say as to propriety of
the right of ownership and other real rights. (Cheng rescission (Iriñgan v. CA, G.R. No. 129107,
v. Genato, G.R. No. 129760, 1998) 2001)
• Registered under Torrens system – 1544 • Forfeiture of amounts valid being in nature of
applies penal clause
• Not registered under the Torrens system – 1544
still applies Contract of Sale – Rescission is applicable
Contract to Sell – Rescission not applicable
If 2nd sale is a judicial sale (made by way of levy on (Roque v. Lapuz, G.R. No. L-32811, 1980)
execution), buyer merely steps into the shoes of the
judgment debtor. Outside of such situation – must Nonpayment of purchase price would automatically
apply to conflicting sales over the same cancel even without further action for rescission.
unregistered parcel of land. If sale 1 occurs when
land is not yet registered and sale 2 is done when
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Exception: If subject matter is residential (b) Period agreed upon – should not exceed 10
lots, the law on rescission applies when years; if it exceeded, valid only for the first 10
there is substantial breach as Maceda law years.
applies. (c) When period to redeem has expired and there
has been a previous suit on the nature of the
G. EXTINGUISHMENT contract – seller still has 30 days from final
judgment on the basis that contract was a sale
1. IN GENERAL with pacto de retro. (Art. 1606)
Causes Rationale: No redemption due to erroneous belief

Grounds (same grounds by which obligations in that it is equitable mortgage which can be
general are extinguished) (PLCCC - PNARF) extinguished by paying the loan.
1. Payment or performance
2. Loss of the subject matter This refers to cases involving a transaction where
3. Condonation or remission one of the parties contests or denies that the true
4. Confusion or merger of rights of creditor and agreement is one of sale with the right to
debtor repurchase; not to cases where the transaction is
5. Compensation conclusively a pacto de retro sale. (Villanueva &
6. Novation Tiansay, Law on Sales, 486, 2016)
7. Annulment
8. Rescission Example: Where a buyer a retro honestly believed
9. Fulfillment of a resolutory condition that he entered merely into an equitable mortgage,
10. Prescription not a pacto de retro transaction, and because of
11. Conventional Redemption such belief he had not redeemed within the proper
12. Legal Redemption (Art. 1231) period. (Leonardo v. CA, G.R. No. 82457, 1993)
2. PACTO DE NOTE: When period has expired, and seller has

RETRO/CONVENTIONAL allowed the period of redemption to expire – seller
REDEMPTION (SALE WITH RIGHT is at fault for not having exercised his rights so he
TO REPURCHASE) should not be granted a new period.
There is conventional redemption when the seller Tender of payment is SUFFICIENT to compel
reserved for himself the right to repurchase the thing redemption but is not in itself a payment that relieves
sold, with the obligation to return: the vendor from his liability to pay the redemption
1. The price of the sale; price. (Paez v. Magno, G.R. No. L-793, 1949)
2. The expenses of contract,
3. Other legitimate payments, Effect When There is No Redemption Made
4. The necessary and useful expenses made on • Jurisprudence before the NCC: buyer a retro
the thing sold (Art. 1601) automatically acquires full ownership
• Under present Art. 1607: there must be judicial
NOTE: This only extinguishes obligations pertaining order before ownership of real property is
to contract of sale. It does not extinguish contract consolidated in the buyer a retro
itself.
The seller who is given the right to repurchase may
The right is exercised only by the seller in whom exercise his right of redemption by paying the buyer:
right is recognized in the contract or by any person 1) the price of the sale; 2) the expenses of the
to whom right was transferred; It must be in the contract; 3) legitimate payments made by reason of
same contract. (Villanueva & Tiansay, Law on the sale; and 4) the necessary and useful expenses
Sales, 474-475, 2016) made on the thing sold. The repurchase was
exercised because from the P10M purchase price
Period to redeem: directly paid to B, he deducted the P2M purchase
(a) No period agreed upon – 4 years from date of price, his expenses, interest, and the price of the
contract loan paid to DBP. He returned the remaining amount
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and one of the tractors. This is a tacit property. Nevertheless, a buyer could acquire valid
acknowledgment of the A’s exercise of his right to title over the whole property if the buyer were an
repurchase. (David v. David, G.R. No. 162365, innocent purchaser for value. (Heirs of Gregorio
2014) Lopez v. Development Bank of the Phils., G.R. No.
193551, 2014.)
How is Redemption Effected
Seller a retro must first pay the following: (PENT) NOTE: A co-owner has “no right to sell or alienate a
1. The Price of the thing sold concrete, specific or determinate part of the thing
2. Expenses of the contract and other legitimate owned in common, because his right over the thing
payments made by reason of the sale is represented by quota or ideal portion without any
3. Necessary and useful expenses made on the physical adjudication.” (Cabrera v. Ysaac, G.R. No.
166790, 2014)
thing sold (Art. 1616)
4. Valid Tender of payment is sufficient (Legaspi
Fruits
v. CA, G.R. No. L-45510, 1986)
What controls is the stipulation between parties as
• Mere sending of notice without valid tender
regards the fruits.
is insufficient.
• Failure to pay useful and unnecessary If none:
expenses entitles vendee to retain land 1. At time of execution of the sale a retro, there are
unless actual reimbursement is made visible or growing fruits – there shall be no pro-
rating at time of redemption if no indemnity was
In Case of Multi-Parties paid by the vendee a retro.
(a) When an undivided thing is sold because co- 2. At time of execution sale a retro, there be no
owners cannot agree that it be allotted to one of fruits but there are fruits at time of redemption –
them – vendee a retro may compel the vendor to pro-rated between vendor a retro and vendee a
redeem the whole thing (Art. 1611) retro giving the vendee a retro a part
(b) When an undivided thing is sold by co- corresponding to the time he possessed the
owners/co-heirs, vendors a retro may only land. (Art. 1617)
exercise his right over his respective share;
vendee a retro may demand that they must come PRE-EMPTION REDEMPTION
to an agreement first and may not be compelled
Arises before sale Arises after sale
to consent to a partial redemption (Art. 1612)
No rescission There can be rescission
(c) When rights of co-owners over an undivided
because no sale of the original sale
thing is sold as regards to their own share –
exists yet
vendee retro cannot compel one to redeem the
Action is directed Action is directed
whole property
against prospective against buyer
(d) Should one of the co-heirs/co-owners succeed in
seller
redeeming the property – such vendor a retro
shall be considered as trustee with respect to the
share of the other co-owners/co-heirs. (De 3. EQUITABLE MORTGAGE
Guzman v. CA, G.R. No. L-47378, 1987)
One which lacks the proper formalities, form of
words, or other requisites prescribed by law for a
NOTE: A Seller can only sell what he or she owns,
mortgage, but shows the intention of the parties to
or that which he or she does not own but has
make the property subject of the contract as security
authority to transfer, and a buyer can only acquire
for a debt and contains nothing impossible contrary
what the seller can legally transfer. Before the
to law. (Cachola v. CA, G.R. No. 97822, 1992)
property is partitioned, the heirs are co-owners of
the property. The heirs cannot alienate the shares
Any money, fruits, or other benefit to be received by
that do not belong to them. Any sale by one heir of
the vendee as rent or otherwise shall be considered
the rest of the property will not affect the rights of the
as interest and is subject to usury laws.
other heirs who did not consent to the sale. Such
sale is void with respect to the shares of the other
heirs. Issuance of a certificate of title is not a grant
of title over petitioners' undivided portions of the
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The essential requisites of an equitable mortgage property in controversy. (Spouses Sy v. De Vera-

are: Navarro, G.R. No. 239088, April 3, 2019)
1. The parties entered into a contract denominated
as a contract of sale; and What to Look for in Determining Nature of
2. Their intention was to secure an existing debt by Contract
way of a mortgage. (Molina vs. CA, G.R. No. 1. Language of the contract
125755, 2003) 2. Conduct of parties – to reveal real intent
A contract with right to repurchase may be deemed Remedies available to the vendor:
to be an equitable mortgage under the following 1. Reformation of contract (Art. 1359)
conditions (IPERTI): 2. Action for declaration of nullity of deed of sale
1. Price of sale with right to repurchase is 3. Action for specific performance (Tolentino v.
unusually Inadequate CA, G.R. No. 128759, 2002); or
2. Seller remains in Possession as lessee or 4. Foreclosure of the mortgage in equity (Briones-
otherwise Vasquez v. CA, G.R. No. 144882, 2005)
3. Upon or after expiration of right to repurchase,
another instrument Extending the period of Rationale Behind Provision on Equitable
redemption or granting new period is executed Mortgage:
4. Buyer Retains for himself a part of the purchase 1. Circumvention of usury law
price 2. Circumvention of prohibition against pactum
5. Seller binds himself to pay Taxes on thing sold commissorium – creditor cannot appropriate the
things given by way of pledge or mortgage;
6. Any other case where the real Intention of
remedy here is foreclosure. The real intention of
parties is to secure the payment of a debt or
parties is that the pretended purchase price is
performance of other obligation (Art. 1602)
money loaned and to secure payment of the
loan, sale with pacto de retro is drawn up. (Heirs
NOTE: In case of doubt – in determining whether it
of Reyes, Jr. v. Reyes, G.R. No. 158377, 2010)
is an equitable mortgage or a sale a retro, the sale
shall be construed as an equitable mortgage. (Art.
1603). Note that in the realm of securities such as 4. LEGAL REDEMPTION
shares of stocks, the parties can enter in to a
The right to be subrogated upon the same terms and
repurchase agreement which essentially is a
conditions stipulated in the contract, in the place of
collateralized or secured loan structured as a sale.
one who acquires the thing by (1) purchase OR (2)
The seller is actually a borrower while the buyer is,
by dation in payment OR (3) by other transaction
in reality, a creditor. The shares of stock “bought”
whereby ownership is transmitted by onerous title.
are actually collateral.
(Art. 1619)
In case of doubt, a contract purporting to be a sale
NOTE: Only applies to contracts of sale.
with right to repurchase shall be considered as an
equitable mortgage. The nomenclature given by the
Types of Legal Redemption:
parties to the contract is not conclusive of its nature.
1. Among co-heirs
(Saclolo v. Marquito, G.R. No. 229243, June 26,
Any of the heirs sells his hereditary rights to a
2019)
stranger before partition:
Article 1602 of the Civil Code provides • Any of the co-heirs may be subrogated to the
circumstances where a contract shall be presumed rights of the purchaser by redeeming said
to be an equitable mortgage. Jurisprudence hereditary right: reimburse the buyer of the price
consistently showed that the presence of even one of the sale
of these circumstances suffices to convert a • Co-heirs have 1 month from receipt of notice in
purported contract of sale into an equitable writing (Art. 1088)
mortgage. Furthermore, courts are generally
inclined to construe a transaction purporting to be a
2. Among co-owners
sale as an equitable mortgage, which involves a
lesser transmission of rights and interests over the Any or all of co-owners sell their shares to 3rd
person:
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• Any co-owner may exercise the right of 5 years from date of conveyance granted by
redemption by paying reasonable price of law, need not be stipulated
property to the buyer
• If 2 or more co-owners desire to exercise right of Redemption in tax sales
redemption, they may only do so in proportion to In case of tax delinquency/failure to pay tax
the share they respectively have in thing owned assessments, property shall be foreclosed.
in common (Art. 1620)
Delinquent payer has 1 year from date of sale to
3. Among adjoining owners redeem by paying to the revenue District Officer the
Rural land amount of tax delinquencies, and interest or
(a) Where piece of rural land has an area not purchase price. (National Internal Revenue Code,
exceeding 1-hectare, adjoining owner has right Sec. 214)
to redeem unless grantee does not own a rural
land Redemption by judgment debtor: 1 year from
(b) If two or more adjacent lot owners desire to date of registration of certificate of sale to redeem
exercise right to redeem, owner of adjoining lot by paying purchaser at public auction with interest
with smaller area shall be preferred (Rules of Court, Rule 39, Secs. 27, 28)
(c) If two or more adjacent lot owners desire to
exercise right to redeem and both have same Redemption in extrajudicial foreclosure: 1 year
lot area, one who first requested shall be from date of sale and registration (Act No. 3135,
granted (Art. 1621) Sec. 6)
Urban land Redemption in judicial foreclosure of mortgage:

(a) When piece of land is small and cannot be right to redeem is granted to debtor mortgagor
used for any practical purpose and bought except when mortgagee is bank of a banking
merely for speculation, owner of adjoining land institution 90 days after finality of judgment. (GSIS
can redeem v. CFI, G.R. No. 45322, 1989)
(b) When 2 or more owners of adjoining lot desire
to exercise right to redeem, owner whose When Period of Redemption Begins to Run:
intended use is best justified shall be preferred. Right of legal pre-emption of redemption shall be
(Art. 1622) exercised within 30 days from notice by the seller.
(Art. 1623)
4. Sale of credit in litigation
When a credit or other incorporeal right in litigation How exercised: Tender of payment is not
is sold, debtor shall have a right to extinguish it by necessary; offer to redeem is enough. (Vda. de
reimbursing the assignee for the price the latter paid Panaligan v. CA, G.R. No. 112611, 1996)
therefor plus judicial costs, interest; except when the
assignment or sale is made: (a) to a co-heir or co- NOTE: Written notice under Art. 1623 is mandatory
owner of the right assigned; (b) to a creditor in for the right of redemption to commence. (PSC vs.
payment of his credit; or (c) to the possessor of a Sps. Valencia, G.R. No. 150060, 2003)
tenement or piece of land which is subject to the
right in litigation assigned. (Arts. 1634, 1635) General Rule: Actual knowledge notwithstanding,
written notice is still required. (Verdad v. CA,
Debtor may exercise right within 30 days from the G.R. No. 109972, 1996)
date assignee demands payment from him (Art.
1634) Exception: When actual knowledge is acquired by
co-heirs living in same land with purchaser (Alonzo
Other Instances When Right of Legal v. IAC, G.R. No. L-72873, 1987) or co-owner was
Redemption is Granted: middleman in sale to 3rd party (Disitro v. CA, G.R.
1. Redemption of homesteads No. 95256, 1991)
2. Public Land Act
3. Land acquired under free patent homestead
subject to repurchase by wife, legal heirs within
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Art. 1623 does not prescribe any distinctive method pertain to him against assignor of all credits prior to
for notifying the redemptioner. (Etcuban v. CA, G.R. assignment and of later ones until he had
No. L-45164, 1987) knowledge of the assignment
• Compensation unless assignor was notified by
debtor that he reserved his right to the
H. ASSIGNMENT OF CREDITS compensation
Transfer of ownership Debtor has knowledge but no consent: may still

1. By tradition or delivery and not by perfection; set up compensation of debts previous to
2. By execution of public instrument because assignment but not the subsequent ones. (Art.
intangibles cannot be physically transferred; 1285)
3. Without necessity of delivering the document
evidencing the credit. Effect of payment of debtor after assignment of
credits
NOTE: This rule does not apply to negotiable 1. Before Notice of the Assignment – Payment to
documents and documents of title which are the original creditor is valid and debtor shall be
governed by special laws. released from his obligation
2. After Notice – Payment to the original creditor
Assignment is not valid as against the assignee. He may be
The owner of a credit transfers to another his rights made to pay again by the assignee (Art. 1626)
and actions in consideration of a price certain in
money or its equivalent Warranties of the assignor
1. Transfers the right to collect the full value of the 1. NO warranty against hidden defect - N/A
credit, even if he paid a price less than such because intangibles have no physical existence
value; (Villanueva & Tiansay, Law on Sales, 532,
2. Transfers all the accessory rights (e.g. 2016)
guaranty, mortgage, pledge, preference) (Art. 2. He warrants the existence and legality of credit
1427); – there is warranty except when expressly sold
3. Debtor can set up against the assignee all the as a doubtful account
defenses he could have set up against the 3. NO warranty as to the solvency of debtor unless
assignor. it is expressly stipulated OR unless the
insolvency was already existing and of public
Difference from sale knowledge at the time of the assignment (Art.
• Technical term but basically a sale 1628)
• Sale of credits and other incorporeal things
(Villanueva, Law on Sales, 524-526, 2016) NOTES:
Warranty shall last for 1 year only (Art. 1629)
Effects of assignment
Lack of knowledge or consent of debtor not One who assigns inheritance right w/o enumerating
essential for validity but has legal effects (“meeting rights shall be answerable for his character as an
of minds” in assignment contemplates that between heir (Art. 1630)
assignor of the credit and his assignee) (Rodriguez
v. CA, G.R. No. 84220, 1992) One who sells whole of certain rights for a lump sum,
shall be answerable for legitimacy of the whole in
Assignment of rights made w/o knowledge of general but not for each of the various parts (Art.
debtor: Debtor may set up against assignee the 1631)
compensation which would pertain to him against
assignor of all credits prior to assignment and of Breach of warranty: liabilities of the assignor of
later ones until he had knowledge of the credit for violation of his warranties
assignment.
Assignor in good faith – Liability is limited to price
Debtor has consented to assignment: Cannot set received, expenses of the contract and other
up against assignee the compensation which would
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legitimate payments made by reason of the

assessment
Assignor in bad faith – Liable ALSO for (expenses

of contract and other legitimate payments plus
useful and necessary expenses) damages (Art.
1628)
ASSIGNMENT OF CREDIT OR INCORPOREAL

RIGHT IN LITIGATION
Requisites (SPA)
1. There must be a Sale or assignment of credit
2. There must be a Pending litigation
3. The debtor must pay the Assignee:
i. Price paid by him AND
ii. Judicial costs incurred by him AND
iii. Interest on the price from the date of
payment (Art. 1634)
The right must be exercised by the debtor within 30

days from the date the assignee demands (judicially
or extra-judicially) payment from him. (Art. 1634)
NOTES:
Presumption: buyer’s purpose is speculation and
law would rather benefit the debtor of such credits
rather than the one who merely speculates for profit.
(Villanueva, Law on Sales, 533, 2016)
When credit or incorporeal right in litigation is

assigned or sold, debtor has a right to extinguish it
by reimbursing the assignee for the price the buyer
paid plus interest (Art. 1634)
Right to redeem by debtor not available in the

following instances (not considered speculative
(Art. 1635)
1. Assignment of credit/incorporeal right to co-heir
or co-owner; the law does not favor co-
ownership
2. Assignment to creditor in payment for his credit
o Presumption is that the assignment is
above suspicion; assignment is in the form
of dacion en pago, thus perfectly legal
3. Assignment to possessor of tenement or piece
of land which is subject to the right in litigation
assigned
o Purpose is to presumably preserve the
tenement
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VI. LEASE
TOPIC OUTLINE UNDER THE SYLLABUS Contract of Lease is a contract by which one
agrees to give to the other for a fixed time and price
A. GENERAL PROVISIONS the use or profit of a thing, or of his services. (The
1. Lease of Things Employees’ Club, Inc. v. China Banking
2. Lease of Work and Services Corporation, G.R. No. L-40188, 1934)
B. RIGHTS AND OBLIGATIONS OF THE Characteristics of Lease of things (CLONS-PEP-
LESSOR AND OF THE LESSEE TP)
1. Obligations of the lessor (a) Consensual
2. Obligations of the lessee (b) Lessor need not be the owner
(c) Onerous
(d) Nominate
(e) Subject matter must be within the commerce of
man (i.e. not belonging to public domain)
(f) Principal contract
(g) Purpose is to allow enjoyment or use of a thing
(h) Purpose to which the thing will be devoted
should not be immoral
(i) Period is temporary
(j) Period may be definite or indefinite
NOTE: Persons disqualified to buy under Arts. 1490

and 1491 of the Civil Code are also disqualified to
become lessees of the things mentioned therein.
(Art. 1646)
Kinds of Leases
1. LEASE OF THINGS
• Concerns movable or immovable property

• One of the parties binds himself to give to
another the enjoyment or use of a thing
• For a price certain and
• For a period which may be definite or indefinite
NOTE: However, no lease for more than 99 years

shall be valid.
General Rule: The contract of lease may be made

orally.
Exception: Lease of real property for more than 1

year (must be in writing to comply with Statute of
Frauds).
2. LEASE OF WORK AND SERVICES
• One of the parties binds himself to execute a

piece of work or to render to the other some
service for a price certain
• The relation of principal and agent does not
exist between them
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inferred from the nature of the thing leased,

CONTRACT OF CONTRACT OF according to the custom of the place.
LEASE OF SERVICE LEASE OF THING 3. Pay the expenses for the deed of lease.
The object of contract The object of contract
is the service itself and is a thing
not the result which it Rights of the Lessee
generates 1. Right to be respected in his possession.
Lessor’s services must Lessor has to deliver 2. Right to be restored to said possession by the
still be paid even if the the thing leased. means established by law or by the Rules of
result intended is not In case of breach, Court, should he be disturbed therein.
attained. there may be an action
In case of breach, no for specific Remedies when lessor or lessee does not
action for specific performance comply with their obligations
performance (a) Rescission and damages; or
(b) Damages while allowing the contract to remain
in force.
B. RIGHTS AND OBLIGATIONS OF THE
Remedy of lessee if lessor refuses to accept the
LESSOR AND OF THE LESSEE rentals
To make a proper tender of payment and
1. OBLIGATIONS OF THE LESSOR consignation in order to extinguish the debt.
(Art. 1654) (DNM)
1. To Deliver the thing which is the object of the Rules on changing the form of the lease
contract in such condition as to render it fit for
the use intended. • The lessor can alter the thing leased provided
2. To make on the same during the lease all the there is no impairment of the use to which the
Necessary repairs in order to keep it suitable for thing is devoted under the terms of the lease.
the use to which it has been devoted unless • The lessee can also make alterations so long as
there is a stipulation to the contrary. the value of the property is not substantially
3. To Maintain the lessee in the peaceful and impaired.
adequate enjoyment of the lease for the entire • The lessee can also make alterations so long as
duration of the contract. the value of the property is not substantially
impaired.
• This is true only if the contract is valid.
Where the contract is void, for having an Rules in case of urgent repairs
existent contract of lease, the lessor has no
right to lease the same property. (Bercero • If the repairs last for not more than 40 days, the
v. Capitol Development Corporation, G.R. lessee is obliged to tolerate the work even
No. 154765, 2007) though the work may annoy him or he may be
deprived of a part of the premises if repairs last
Nature of the duty of the Lessor to maintain for not more than 40 days.
peaceful possession of the premises by the • If repairs last for 40 days or more, lessee can
Lessor ask for reduction of the rent in proportion to the
time – including the 1st 40 days – and the part
This is merely a warranty that the lessee shall not of the property of which he is deprived.
be disturbed in his legal, and not physical,
possession. (Chua Tee Dee v. Court of Appeals, NOTE: In either case, rescission may be availed of
G.R. No. 135721, 2004) if the main purpose of the lease is to provide a
dwelling place and the property becomes
uninhabitable.
2. OBLIGATIONS OF THE LESSEE
(Art. 1657) (PUP) Effects if lessor fails to make urgent repairs
The lessee may (ROSS):
1. Pay the price of the lease according to the terms (a) Ask for Rescission, in case of substantial
stipulated. damage to him.
2. Use the thing leased as a diligent father of a (b) Order repairs at the lessor’s cost;
family devoting it to the use stipulated, and in (c) Sue for damages; or
the absence of stipulation, to that which may be (d) Suspend the payment of the rent;
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• Lease will be for the said period and it ends

on the day fixed without need of a demand.
Effect of destruction of the subject matter with
respect to the lease (b) Lease may be without a fixed period
IF TOTALLY IF ONLY PARTIALLY i. For rural lands (Art. 1682) - It shall be for all
DESTROYED DESTROYED time necessary for the gathering of fruits
Lease is extinguished Lessee can choose which the whole estate may yield in 1 year,
between reduction of or which it may yield once.
the rent and rescission ii. For urban lands (Art. 1687)
(i) If rent is paid daily, lease is from day to
Rules upon Termination of Lease governing day.
useful improvements caused by the lessee (ii) If rent is paid weekly, lease is from
(OAR) week to week.
If made in good faith and suitable to the use for (iii) If rent is paid monthly, lease is from
which the lease is intended, without altering the form month to month.
or substance of the property: (iv) If rent is paid yearly, lease is from year
to year.
1. Lessor may Appropriate the improvements
provided he pays the lessee ½ of its value at The general rule is lease contracts survive the death
that time; of the parties and continue to bind the heirs except
2. If lessor does not appropriate, lessee may if the contract states otherwise. (Inocencio vs.
Remove the improvements even if the principal Hospicio de San Jose, G.R. No. 201787, 2013)
thing may suffer damage;
3. If improvement is Ornamental, no right of The well-entrenched principle is that a lease from
reimbursement, but lessee may remove them month-to-month is with a definite period and expires
provided no damage is caused to the principal at the end of each month upon the demand to
thing. vacate by the lessor. (Cebu Bionic Builders Supply,
Inc. vs. Development Bank of the Philippines, G.R.
No. 154366, 2010)
NOTE: Lessee has no right of retention of the
premises if the lessor does not pay. His only right is Rules on Extension of the Lease Period
right of removal if lessor does opt not to pay and
appropriate. 1. If a lease contract for a definite term allows
lessee to extend the term, there is no necessity
Kinds of Trespass in Lease for lessee to duly notify lessor of his desire to so
extend the term, unless the contrary is
(a) Trespass in fact (perturbacion de mere stipulated.
hecho): 2. “May be extended” as stipulation: lessee can
extend without lessor’s consent but lessee must
• Lessor is not liable for the mere fact of a notify lessor.
trespass or trespass in fact made by a third 3. “May be extended for 6 years, agreed upon by
person of a leased property. both parties” as stipulation: this must be
• Mere fact or mere act of trespass is when interpreted in favor of the lessee. Hence,
the third person claims no right whatever. ordinarily the lessee, at the end of the original
• Physical enjoyment is reduced. period, may either:
(a) Leave the premises
(b) Trespass in law (perturbacion de derecho): (b) Remain in possession
4. In co-ownership, assent of co-owner is needed;
• A third person claims legal right to enjoy the otherwise, it is void or ineffective as against
premises non-consenting co-owners.
• Lessor will be held liable 5. Where according to the terms of the contract,
the lease can be extended only by the written
Duration of Lease consent of the parties thereto, no right of
extension can rise without such written consent.
(a) Lease may be for a determinate time or
fixed period
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Implied new lease (Tacita Reconducion) enjoyment of leasehold rights to the sole and
exclusive will of the lessee.
• Lease that arises if at the end of the contract the
lessee should continue enjoying the thing Sublease
leased for 15 days with the acquiescence of the • A lessee may sublease the thing leased unless
lessor, unless a notice to the contrary had there is an express prohibition to do so.
previously been given by either party. • Remedy of lessor if lessee violates prohibition:
• Period of the implied new lease is not that of the action for rescission of the lease and damages.
original contract but the time established in • If the prohibition to sublease is not express but
Arts.1682 and 1687 (see Duration of Lease only implied, the sublease will still be allowed.
above). • Duration of sublease cannot be longer than that
• Other terms of the original contract are revived of the lease to which it is dependent.
except option to purchase in case such was in • The prohibition against subleasing may not
the original contract. embrace the taking in of boarders. (Mallare v.
Court of Appeals, G.R. No. 85108, 1989)
NOTE: Terms that are revived are only those which • In a sublease arrangement, there are two
are germane to the enjoyment of possession, but distinct leases: the principal lease and the
not those with respect to special agreements which sublease.
are by nature foreign to the right of occupancy or ASSIGNMENT OF
enjoyment inherent in a contract of lease – such as LEASE
SUBLEASE
an option to purchase the leased premises. (Dizon
v. Magsaysay, G.R. No. 23399, 1974) Lessee remains a Lessee is
party in the contract. disassociated from the
original contract of
Requisites for Implied New Lease (ENC) lease.
Two leases and two Only one (lessor-
1. The term of the original contract has Expired; distinct juridical assignee who
2. The lessor has Not given the lessee a notice to relationship (lessor- becomes the lessee)
vacate; lessee and sublessor- because lessee
3. The lessee Continued enjoying the thing leased sublessee) transmits absolutely
for at least 15 days with the acquiescence of the his rights and his
lessor; personality disappears
Sublessee does not Assignee has a direct
have any direct action action against the
When there is no implied new lease against the lessor lessor, there being
novation
(a) When before or after the expiration of the term, Subleasing is allowed Assignment is not
there is a notice to vacate given by either unless there is an allowed unless the
party. express prohibition lessor gives his
(b) When there is no definite fixed period in the consent
original lease contract as in the case of
successive renewals.
NOTE: The sub-lessee is primarily liable to his sub-
EXTENSION OF RENEWAL OF lessor and only a court can extinguish or modify this
LEASE CONTRACT LEASE CONTRACT primary liability if the sub-lessor contests the pre-
termination of the principal lease by the lessor.
Original contract Original contract
(Tamio v. Ticson, G.R. No. 154895, 2004)
subsists ceases to exist
Creates additional Creates a new
term contract Circumstances when a sub-lessee is made liable to
the lessor:
i. For all acts which affect the use and preservation
Perpetual Lease of the thing leased in the manner stipulated
• A lease contract providing that the lessee can between the lessor and the lessee.
stay in the premises for as long as he wants and ii. For any rent due to the lessor from the lessee
for as long as he can pay the rentals and its which the latter failed to pay:
increases. • Sublessee is subsidiarily liable
• This is not permissible; it is a purely potestative • Sublessee shall not be responsible beyond
condition because it leaves the effectivity and amount of rent due from him, in accordance
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with the terms of the sublease, at the time

of the extrajudicial demand by the lessor
Grounds for Ejectment

(a) When the period agreed upon or that which is
fixed for the duration of leases (Arts.1682 and
1687) has expired (see Duration of Lease).
(b) Lack of payment of the price stipulated.
• In case lessor refuses to accept rentals,
lessee should make tender of payment,
and consignation otherwise there is no
payment.
• Willingness to pay is not payment.
(c) Violation of any of the conditions agreed upon
in the contract.
(d) When the lessee devotes thing leased to any
use or service not stipulated which causes the
deterioration thereof, or if he does not observe
the requirement in Art. 1657.
In a contract of lease, the twin remedies of

rescission and judicial ejectment become available
after either the failure to pay rent or to comply with
the conditions of the lease.
Technically, no extrajudicial rescission effectively

takes place as a result of the violations until the
demand to pay or comply is duly served and is
rejected or disregarded by the lessee.
The tenant's refusal to heed the demand to vacate,

coming after the demand to pay or to comply
similarly went unheeded, renders unlawful the
continued possession of the leased premises.
(Cebu Automatic Motors, Inc. vs. General Milling
Corporations, G.R. No. 151168, 2010)
The lessor may judicially eject the lessee for any

of the following causes: (EPCU)
1. When the period agreed upon, or that which

is fixed for the duration of leases under
Articles 1682 and 1687, has Expired;
2. Lack of Payment of the price stipulated;
3. Violation of any of the Conditions agreed
upon in the contract;
Lessee devotes the thing leased to any Use or

service not stipulated which causes the deterioration
thereof; or if he does not observe the requirement in
No. 2 of Article 1657.
————- end of topic————-
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VII. PARTNERSHIP
1. DEFINITION
1. Definition Partnership is a contract whereby two or more
2. Elements persons bind themselves to contribute money,
3. Characteristics property, or industry to a common fund, with the
4. Rules to determine existence intention of dividing the profits among themselves.
5. Partnership term Two or more persons may also form a partnership
6. Partnership by estoppel for the exercise of a profession (CIVIL CODE, Art.
7. Partnership as distinguished from joint 1767)
venture
8. Professional partnership 2. ELEMENTS
9. Management
B. OBLIGATIONS OF THE PARTNERS Elements of a Partnership (ACD)
1. Rights and obligations of the partnership 1. Meeting of minds (Agreement)
2. Obligations of partners among themselves 2. To Contribute money, property, or industry to a
3. Obligations of partners to third persons common fund; and
C. DISSOLUTION AND WINDING UP 3. Intent to Divide profits (and losses) among the
D. LIMITED PARTNERSHIP contracting parties (Jarantilla, Jr. v. Jarantilla,
G.R. No. 154486)
Essential Features of Partnership (VaLeCLO)

1. There must be a Valid contract.
2. The parties must have Legal capacity to enter
into the contract.
3. There must be a mutual Contribution of money,
property or industry to a common fund. (CIVIL
CODE, Art. 1767)
4. There must be a Lawful object. (CIVIL CODE, Art.
1770)
5. The purpose or primary purpose must be to
Obtain profits and divide the same among the
parties. (CIVIL CODE, Art. 1767)
Additional Requirement for Juridical

Personality
1. It is also required that the articles of partnership
must not be kept secret among the members
and the partners do not contract in their own
name; otherwise, the association shall have no
legal personality and shall be governed by the
provisions on Co-ownership. (CIVIL CODE, Art.
1775)
2. "Kept secret among the members" where
secrecy is directed not to third persons but to
some of the partners. (CIVIL CODE, Art. 1775)
3. This does not mean that there could be no
contractual relations amongst the parties; there
is only no partnership or association with
distinct legal personality.
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3. CHARACTERISTICS (CIVIL CODE, Art. 1770; REVISED PENAL CODE,

Art. 45)
Characteristics of a Partnership 4. The contributions of the partners shall not be
1. Essentially contractual in nature (CIVIL CODE, confiscated unless they fall under (c) (CIVIL
Arts. 1767, 1784) CODE, Arts. 1411 and 1412)
2. Separate juridical personality (CIVIL CODE, Art.
1768) Judicial decree is not necessary to dissolve an
3. Delectus personae (CIVIL CODE, Arts. 1804, unlawful partnership. (De Leon, 2019)
1813)
4. Mutual Agency (CIVIL CODE, Art. 1803) That there is no legally constituted partnership does
5. Personal liability of partners for partnership not mean that there are no contractual or legal
debts (CIVIL CODE, Arts. 1816, 1817) relations among the parties.
4. RULES TO DETERMINE EXISTENCE Effect of Partial Illegality

Where a part of the business of a partnership is legal
and a part illegal, an account of that which is legal
General Rule
may be had.
Persons who are not partners as between
themselves, cannot be partners as to third persons
Where, without the knowledge or participation of the
(CIVIL CODE, Art. 1769[1])
partners, the firm's profits in a lawful business have
been increased by wrongful acts, the innocent
Exception
partners are not precluded as against the guilty
Partnership by estoppel (CIVIL CODE, Art. 1825) [see
partners from recovering their share of the profits.
Section (6) below]
Formation of Partnership
Other rules to determine whether a partnership
a. How Partnership is Formed
exists (CIVIL CODE, Art. 1769)
General Rule: A partnership may be
The following, alone, do not establish a partnership:
constituted in any form, except where
1. Co-ownership or co-possession;
immovable property or real rights are
2. Sharing of gross returns, whether or not the
contributed thereto, in which case a public
persons sharing them have a joint or common
instrument shall be necessary.. (CIVIL CODE, Art.
right or interest in any property from which the
1771)
returns are derived;;
3. Receipt by a person of a share of the profits of
b. Burden of Proof and Presumption
a business is prima facie evidence that he is a
The existence of a partnership must be proven, not
partner in the business, unless such were
presumed. Persons acting as partners are
received in payment as:
presumed to have entered into a contract of
i. Debt by installments or otherwise;
partnership. The burden of proof is shifted to the
ii. Wages or rent;
party denying its existence.
iii. Annuity;
iv. Interest on loan (even if the interest is
An extant partnership is presumed to exist until
based on the profits of the business);
proven terminated.
v. Consideration for sale of goodwill of
business or other property by installments
Use of the term “partner” does not necessarily show
or otherwise.
existence of partnership. Non-use of the terms
“partnership” or “partners” are not conclusive as to
A partnership must have a lawful object or purpose,
non-existence or partnership, but entitled to weight.
and must be established for the common benefit or
interest of the partners. (CIVIL CODE, Art. 1770)
5. PARTNERSHIP TERM
Effects of an Unlawful Partnership (i.e.,
established for an unlawful object or purpose) Partnership at will
1. Void ab initio such that it never existed in the One in which no fixed term is specified and is not
eyes of the law (CIVIL CODE, Art. 1409[1]) formed for a particular undertaking or venture which
2. Profits shall be confiscated in favor of the may be terminated anytime by mutual agreement.
government (CIVIL CODE, Art. 1770)
3. Instruments or tools and proceeds of the crime Partnership with a fixed term
shall also be forfeited in favor of the government One in which the partners agree to themselves the
term of which the partnership is to subsist.
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and one or more limited partners, the latter

Common Types of Partnership not being personally liable for the
1. Universal v. Particular Partnership obligations of the partnership.
a. Universal Partnership
i) Universal Partnership of All Present 6. PARTNERSHIP BY ESTOPPEL
Property (CIVIL CODE, Art. 1779)
Comprises the following: Definition of Partnership by estoppel
o Property which belonged to each Either by words or conduct, a person does any of
of the partners at the time of the the following:
constitution of the partnership 1. Directly represents himself to anyone as a
o Profits which they may acquire partner in an existing partnership or in a non-
from all property contributed existing partnership
ii) Universal Partnership of Profits 2. Indirectly represents himself by consenting to
Comprises all that the partners may another representing him as a partner in an
acquire by their industry or work during existing partnership or in a non-existing
the existence of the partnership (CIVIL partnership
CODE, Art. 1780).
When a person has been thus represented to be a
But persons who are prohibited from partner in an existing partnership, or with one or
giving donations or advantage to each more persons who are not actually partners, he is
other cannot enter into a universal an agent of the persons consenting to such
partnership (CIVIL CODE, Art. 1782). representation in order to bind them to the same
extent and in the same manner as though he were
o Those made between persons a partner in fact (CIVIL CODE, Art. 1825).
who were guilty of adultery or
concubinage at the time of the Elements to establish liability as a partner on the
donation; ground of estoppel:
o Those made between persons 1. Defendant represented himself as partner or
found guilty of the same criminal represented by others as such;
offense, in consideration thereof; 2. Not denied or refuted by defendant; and
and 3. Plaintiff relied on such representation. (De
o Those made to a public officer or Leon, 2019)
his wife, descendants and
ascendants, by reason of his LIABILITIES IN ESTOPPEL
office. (CIVIL CODE, Art. 739) LIABILITY
o Those between spouses, direct or When all the A partnership act or
indirect, including those persons members of an obligation results, therefore
living together as husband and existing the partnership is liable
wife without a valid marriage. partnership
(FAMILY CODE, Art. 87) consent to the
representation
b. Particular Partnership (CIVIL CODE, Art.
Other cases It is the joint act or
1783)A particular partnership has for its
obligation of the person
objects:
acting and persons
i) Determinate things
consenting to the
ii) Their use or fruits
representation. Person
iii) Specific undertaking
who represented himself &
iv) Exercise of profession or vocation
all those who made
representation liable pro-
2. General v. Limited Partnership
rata/ jointly
a. General Partnership
- Consists of general partners who are liable
pro rata and subsidiarily and sometimes
solidarily with their separate property for 7. PARTNERSHIP AS DISTINGUISHED
partnership debts FROM JOINT VENTURE
b. Limited Partnership
- One formed by two or more persons having The observation that a joint venture is for a single
as members one or more general partners transaction while a partnership entails a continuing
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business is not entirely accurate in Philippine law. A When there has been duly registered articles of
partnership may be universal or particular and a partnership, and subsequently the original
particular partnership has for its object a specific partners accept an industrial partner but do not
undertaking (Roque, Jr. v. COMELEC, G.R. No. register a new partnership, and thereafter the
188456). industrial partner retires from the business, and
the original partners continue under the same
Generally understood to mean an organization set-up as the original partnership, then although
formed for some temporary purpose, a joint venture the second partnership was dissolved with the
is likened to a particular partnership or one which withdrawal of the industrial partner, there
“has for its object determinate things, their use or resulted a reversion back into the original
fruits, or a specific undertaking, or the exercise of a partnership under the terms of the registered
profession or vocation. (Realubit v. Jaso, G.R. No. articles of partnership. There is not constituted
178782) a new partnership at will. (Rojas v. Maglana,
G.R. No. 30616)
Joint Venture
A joint venture is a form of partnership, and thus, to b. As to purpose
be governed by the laws on partnership. (Marsman 1. Commercial or trading partnership- one
Drysdale Land, Inc. v. Philippine Geoanalytics, G.R. formed for the transaction of business
No. 183374) 2. Professional or non-trading
partnership- one formed for the exercise
As a rule, corporations are prohibited from entering of a profession
into partnership agreements; consequently,
corporations can enter into joint venture agreements
with other corporations or partnerships for certain
transactions in order to form “pseudo partnerships.”
A joint venture agreement between and among
corporations may be seen as similar to partnerships
since the elements of partnership are present.
(Narra Nickel Mining and Dev’t Corp. v. Redmont
Consolidated Mines Corp., G.R. No. 195580)
NOTE: Section 35(h) of the Revised Corporation

Code now expressly allows corporations to form
partnerships with both natural and juridical persons.
A verbal agreement to form a joint venture company

is valid and binding. The failure to reduce the
agreement to writing does not affect its validity or
enforceability as there is no law or regulation which
provides that an agreement to incorporate must be
in writing. (Fong v. Dueñas, G.R. No. 185592)
8. PROFESSIONAL PARTNERSHIP
General professional partnership

A general professional partnership exists when two
or more persons may also form a partnership for the
exercise of a profession (CIVIL CODE, Art. 1767 [2]).
Other Classifications of Partnership

a. As to Legality of Existence
1. De jure partnership- one which has
complied with all the legal requirements for
its establishment
2. De facto- one which has failed to comply
with all the legal requirements for its
establishment
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9. MANAGEMENT Manner of All partners If refusal of

management are agents of partner is
POWERS OF THE PARTNER/S APPOINTED not agreed the manifestly
AS MANAGER upon (CIVIL partnership prejudicial to
Partner is Power of Vote of CODE, Art. (i.e., any interest of
appointed managing partners 1803) partner can partnership,
manager in partner is representing bind the court's
the Articles irrevocable controlling partnership, intervention
of without interest is subject to Art. may be
partnership just/lawful necessary to 1801 above). sought (CIVIL
(CIVIL CODE, cause; revoke power CODE, Art.
Art. 1800) Revocable (CIVIL CODE, Unanimous 1803(2))
only when in Art. 1800) consent
bad faith required for
(CIVIL CODE, alteration of
Art. 1800) immovable
Partner is Power is property (CIVIL
appointed revocable any CODE, Art.
manager time by the 1803(1))
after vote of the
constitution partners (Art.
of 1800) B. OBLIGATIONS OF THE PARTNERS
partnership
(CIVIL CODE, 1. RIGHTS AND OBLIGATIONS OF
Art. 1800) THE PARTNERSHIP
Two or more Each may In case of
persons execute all opposition by
All partners, including industrial ones, shall be liable
entrusted acts of any of the
pro rata with all their property and after all the
with administration partners,
partnership assets have been exhausted, for the
management (CIVIL CODE, decision of
contracts which may be entered into in the name
of Art. 1801) majority of all
and for the account of the partnership, under its
partnership the partners
signature and by a person authorized to act for the
without shall prevail;
partnership. However, any partner may enter into a
specification
separate obligation to perform a partnership
of duties/ In case of tie,
contract. (CIVIL CODE, Art. 1816)
stipulation decision of
that each partners
NOTE: Except limited liability partners
shall not act owning
w/o the controlling
Any stipulation against personal liability of partners
other's interest shall
for partnership debts is void, except as among them.
consent prevail (CIVIL
(CIVIL CODE, CODE, Art.
Art. 1801) 1801)
Partners are liable solidarily with the partnership for
Stipulated Concurrence Absence or
everything chargeable to the partnership when
that none of of all disability of
caused by the wrongful act or omission of any
the managing necessary for any one
partner acting in the ordinary course of business of
partners the validity of cannot be
the partnership or with authority from the other
shall act w/o acts (CIVIL alleged unless
partners and for partner's act or misapplication of
the consent CODE, Art. there is
properties. (CIVIL CODE, Art. 1824)
of others 1802) imminent
(CIVIL CODE, danger of
Unless there is a stipulation to the contrary, a newly
Art. 1802) grave or
admitted partner into an existing partnership is liable
irreparable
for all the obligations of the partnership arising
injury to
before his admission but out of partnership property
partnership
shares. (CIVIL CODE, Art. 1826) This means that his
(CIVIL CODE,
liability for obligations arising prior to his admission
Art. 1802)
is only to the extent of his partnership share (i.e., he
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cannot be held personally liable for obligations consideration of share in the profits; hence,
arising prior to his admission). as generally, partners are not entitled to
charge each other. (Marsh’s Appeal, 69 Pa.
Partnership creditors are preferred to those of each St. 30)
of the partners as regards the partnership property.
(CIVIL CODE, Art. 1827) Every partner is bound to work to the extent
of his ability for the benefit of the whole,
Upon dissolution of the partnership, the partners without regard to the services of his co-
shall contribute the amounts necessary to satisfy the partners, and without comparison of value;
partnership liabilities. (CIVIL CODE, Art. 1839(4), (7)) for services to the firm cannot, from their
very nature, be estimated and equalized by
A partner’s personal obligation for partnership compensation of differences. (Beatty v.
liabilities is subsidiary in nature - they shall only be Wray, 7 Harris 519)
liable with their property after all partnership
properties have been exhausted. (Co-Pitco v. Yulo, But: A partner who has agreed to render
G.R. No. L-3146) special service to the partnership, for the
performance of which he is qualified, and
2. OBLIGATIONS OF PARTNERS which is one of the inducements for the
AMONG THEMSELVES other members to enter the partnership,
was found liable civilly to account for the
Obligation to Contribute to the Common Fund value of such service upon a finding that he
wrongfully refused to perform such service.
1. What May Be Contributed
Contribution must be in equal shares unless But then again: Specific performance not
otherwise stipulated. (CIVIL CODE, Art. 1790) available due to constitutional prohibition
against involuntary servitude.
a. Money
Failure to contribute promised money A limited partner is not allowed to
makes the promissory-partner liable for the contribute services, only “cash or other
amount promised including the interest due property” (CIVIL CODE, Art. 1845);
and damages arising from the time he otherwise, he is considered an “industrial
should have complied with his or her and general partner” and thus, not
undertaking. (CIVIL CODE, Art. 1786, Par. 1) exempted from personal liability.
2. When Immovables or Real Rights

b. Property Contributed
May include intangible or incorporeal (e.g., If immovables are not contributed, even if the capital
credit). (Lim Tong Lim v. Phil. Fishing is at least PhP3,000, failure to comply with the
Gear, G.R. No. 136448) requirement of appearance in public instrument and
SEC Registration will not affect the liability of the
Liable for fruits from the time property partnership and the members thereof to third
should have been delivered without need of persons. (CIVIL CODE, Art. 1772, [2])
demand; also include obligation to preserve
the promised property with the diligence of When immovable property are contributed, (1) the
a good father of a family pending delivery. Articles of Partnership must appear in a public
(CIVIL CODE, Art. 1786 [1] and [2]) instrument, and (2) there must be an inventory of the
property contributed signed by the parties and
c. Industry attached to the public instrument. (CIVIL CODE,
An industrial partner is one who contributes Arts.1771 and 1773)
his industry, labor, or services to the
partnership. He is considered the owner of EFFECT OF ABSENCE OF REQUIREMENTS
his services, which is contribution to the UNDER ARTICLES 1771 AND 1773
common fund. (Limuco v. Calina, [C.A.] No. Not in Public Instrument, No
Void
10099-R) Inventory
May concur with any or both of the first two In a Public Instrument, No Inventory Void
or in the absence of any one or both of
them; manual and/or intellectual in
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Not in Public Instrument, With The partner shall be liable as a debtor of the
Void partnership in two instances:
Inventory
- when he fails to contribute money, on the
date he undertook to do so;
In a Public Instrument, With Inventory Valid - when he converts partnership funds for his
own use, on the date he does so.
In both instances, the partner becomes a
NOTE: Partnerships void under Art.1773, in relation partnership debtor and is liable for interest and
to Art. 1771, may still be considered either de facto damages. (CIVIL CODE, Art. 1788)
or estoppel partnerships vis-à-vis third persons; may
even be treated as an ordinary contract from which A partner who promises to contribute to partnership
rights and obligations may validly arise, although not becomes a promissory debtor of the partnership,
exactly a partnership under the Civil Code. (Torres including liability for interests and damages caused
v. CA, G.R. No. 134559) for failure to pay, and which amounts may be
deducted upon dissolution of the partnership from
Failure to prepare an inventory of the immovable his share in the profits and net assets. (Rojas v.
property contributed, in spite of Art. 1773 declaring Maglana, G.R. No. 30616)
the partnership void would not render the
partnership void when: 4. Obligations with respect to Contribution to
- No third party is involved (since Art. 1773 Partnership Capital
was intended for the protection of 3rd
parties); Partners must contribute equal shares to the capital
- Partners have made a claim on the of the partnership unless there is stipulation to
partnership agreement. contrary. (CIVIL CODE, Art. 1790)
3. Consequence of Failure to Contribute Capitalist partners must contribute additional capital
in case of imminent loss to the business of the
Each partner has the obligation: partnership and there is no stipulation otherwise;
a. To contribute at the beginning of the refusal to do so shall create an obligation on his part
partnership or at the stipulated time the to sell his interest to the other partners. (CIVIL CODE,
money, property or industry which he may Art. 1791)
have promised to contribute. (CIVIL CODE,
Art. 1786) a. Requisites:
b. To answer for eviction in case the i) There is an imminent loss of the
partnership is deprived of the determinate business of the partnership
property contributed (CIVIL CODE, Art. 1786) ii) The majority of the capitalist partners
c. To answer to the partnership for the fruits are of the opinion that an additional
of the property the contribution of which he contribution to the common fund would
delayed, from the date they should have save the business
been contributed up to the time of actual iii) The capitalist partner refuses
delivery (CIVIL CODE, Art. 1786) deliberately to contribute (not due to
d. To preserve said property with the diligence financial inability)
of a good father of a family pending delivery iv) There is no agreement to the contrary
to partnership (CIVIL CODE, Art. 1163) (De Leon, 2019)
e. To indemnify partnership for any damage
caused to it by the retention of the same or b. Fiduciary Duty
by the delay in its contribution (CIVIL CODE, A partnership is a fiduciary relation—one
Arts.1788, 1170) entered into and to be maintained on the
basis of trust and confidence. With that, a
In the event that there is a failure to contribute partner must observe the utmost good faith,
property promised: fairness, and integrity in his dealings with
- Partners become ipso jure a debtor of the the others:
partnership even in the absence of any i) He cannot directly or indirectly use
demand (CIVIL CODE, Art. 1169[1]) partnership assets for his own benefit;
- Remedy of the other partner is not ii) He cannot carry on a business of the
rescission but specific performance with partnership for his private advantage;
damages from defaulting partner (CIVIL
CODE, Art. 1788)
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iii) He cannot, in conducting the business competitive. (Albano Civil Law Reviewer, p. 822,
of the partnership, take any profit 2008 ed.)
clandestinely;
iv) He cannot obtain for himself that which When a partner engages in a separate business
he should have obtained for the enterprise that is competitive with that of the
partnership (e.g., business partnership, the other partner’s withdrawal becomes
opportunity) thereby justified and for which the latter cannot be
v) He cannot carry on another business in held for damages. (Rojas v. Maglana, G.R. No
competition with the partnership; and 30616)
vi) He cannot avail himself of knowledge
or information, which may be properly B. Managing Partner who Collects Debt from
regarded as the property of the Third Party
partnership.
Obligation of a managing partner who collects
A. Prohibition to Engage in Competitive debt from person who owed him and the
Business partnership (CIVIL CODE, Art. 1792):
i. Apply sum collected to the two credits (i.e.,
1. If an industrial partner engages in any amount owed to the managing partner in
business without the consent of the his personal capacity and amount owed to
partnership: the partnership) in proportion to their
i. He can be excluded from the partnership; amounts.
or ii. If he received it for the account of
ii. The capitalist partners can avail of the partnership, the whole sum shall be applied
benefit he obtained from the business. to partnership credit.
NOTE: The capitalist partners have the right to
file an action for damages against the industrial Requisites:
partner in either case. (CIVIL CODE, Art. 1789) 1. There exist at least two debts, one where the
collecting partner is creditor and the other,
2. If the capitalist partner engages in a where the partnership is the creditor
business that competes with the business of 2. Both debts are demandable
the partnership 3. The partner who collects is authorized to
i. He may be required to bring to the common manage and actually manages the partnership
fund the profits he derived from the
competing business; and C. Partner who Receives Share of Partnership
ii. He shall personally bear the losses. (CIVIL Credit
CODE, Art. 1808) Obligation of partner who receives share of
iii. He may be ousted form the partnership, partnership credit from a debtor who becomes
especially if there was a warning. (De Leon, insolvent:
2019) Bring to the partnership capital what he has received
even though he may have given receipt for his share
INDUSTRIAL CAPITALIST only (CIVIL CODE, Art. 1793)
PARTNER PARTNER
Cannot engage in any Cannot engage in Requisites:
business unless business (with same 1. A partner has received, in whole or in part, his
partnership expressly kind of business with share of the partnership credit
permits him to do so. the partnership) for his 2. The other partners have not collected their
(CIVIL CODE, Art. 1789) own account, unless shares
there is a stipulation to 3. The partnership debtor has become insolvent
the contrary. (CIVIL
CODE, Art. 1808) BEARING THE RISK OF LOSS OF THINGS
CONTRIBUTED (Art. 1795)
As a rule, an industrial partner may not engage in Specific and Risk is borne by
any business during the existence of the determinate things partner
partnership, unless the capitalist partners expressly which are not fungible
permit him to do so (CIVIL CODE, Art. 1789). The where only the use is
reason is that his industry must be given only to the contributed
partnership. This is true even if the business is not
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Specific and Risk is borne by their property

determinate things the partnership after all the
ownership of which is partnership
transferred to the assets have
partnership been
Fungible things Risk is borne by exhausted.
(consumable) partnership (CIVIL CODE, Art.
1816)
Things contributed to Risk is borne by
be sold partnership NOTE: A stipulation which excludes one or more
Things brought and Risk is borne by partners from any share in the profits and losses is
appraised in the partnership void. (CIVIL CODE, Art. 1799)
inventory
Specific and Risk is borne by 5. Other Rights and Obligations of Partners
determinate things partner a. Right to associate another person with him
which are not fungible in his share without consent of other
where only the use is partners (sub-partnership) (CIVIL CODE, Art.
contributed 1804)
b. Right to inspect and copy partnership
c. Rules for Distribution of Profits and books at any reasonable hour (CIVIL CODE,
Losses (CIVIL CODE, Art. 1797) Art. 1805)
c. Right to a formal account as to partnership
affairs (even during existence of
PROFITS LOSSES partnership): (CIVIL CODE, Art. 1809)
With According to According to i) If he is wrongfully excluded from
agreement agreement agreement partnership business or possession of
Without Share of If sharing of its property by his copartners
agreement capitalist profits is ii) If right exists under the terms of any
partner is in stipulated - agreement
proportion to apply to sharing iii) As provided by Art. 1807
his capital of losses iv) Whenever other circumstances render
contribution it just and reasonable
d. Duty to render on demand true and full
If no profit
information affecting partnership to any
Share of sharing
partner or legal representative of any
industrial stipulated -
deceased partner or of any partner under
partner - as losses shall be
legal disability (CIVIL CODE, Art. 1806)
may be just and borne according
e. Duty to account to the partnership as
equitable under to capital
fiduciary (CIVIL CODE, Art. 1807)
the contribution
circumstances
6. Responsibility of Partnership to Partners
Purely industrial
a. To refund the amounts disbursed by
partner not
partner in behalf of the partnership plus
liable for losses.
corresponding interest from the time the
NOTE: This is
expenses are made (loans and advances
only with
made by a partner to the partnership aside
respect to the
from capital contribution)
obligation of the
b. To answer for obligations partner may have
partners among
contracted in good faith in the interest of the
each other.
partnership business
Insofar as third
c. To answer for risks in consequence of its
parties are
management
concerned, all
partners,
including 3. OBLIGATIONS OF PARTNERS TO
industrial ones, THIRD PERSONS
shall be liable
pro rata with all Every partnership shall operate under a firm name.
Persons who include their names in the partnership
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name even if they are not members shall be liable Act which is not Does not bind
as a partner. (CIVIL CODE, Art. 1815) apparently for the partnership unless
carrying of business in authorized by other
All partners shall be liable for contractual obligations the usual way partners
of the partnership with their property, after all
partnership assets have been exhausted: Acts of strict dominion
1. Pro rata or ownership:
2. Subsidiary (CIVIL CODE, Art. 1816) Assign partnership
property in trust for
Admission or representation made by any partner creditors
concerning partnership affairs within scope of his Dispose of good-will
authority is evidence against the partnership. (CIVIL of business
CODE, Art. 1820) Do an act which would
make it impossible to
General rule: Notice to partner of any matter carry on ordinary
relating to partnership affairs operate as notice to business of
partnership. partnership
Confess a judgment
Exception: Except in case of fraud. Enter into
compromise
Cases of Knowledge of a Partner concerning a
• Knowledge of partner acting in the partnership claim or
particular matter, acquired while a partner liability
• Knowledge of the partner acting in the Submit partnership
particular matter then present to his mind claim or liability to
• Knowledge of any other partner who arbitration
reasonably could and should have Renounce claim of
communicated it to the acting partner (CIVIL partnership
CODE, Art.1821) Acts in contravention Partnership is not
Partners and the partnership are solidarily liable to of a restriction on liable to 3rd persons
third persons for the partner's tort or breach of trust. authority having actual or
(CIVIL CODE, Art. 1824) presumptive
knowledge of the
Liability of incoming partner is limited to: restrictions
1. For partnership obligations arising before his
admission - his share in the partnership Admission or representation made by any partner
property concerning partnership affairs within scope of his
2. For partnership obligations arising upon his authority is evidence against the partnership. (CIVIL
admission - his share in the partnership CODE, Art. 1820)
property and his separate property (CIVIL CODE,
Art. 1826) Effects of Conveyance of Real Property
Belonging to Partnership (CIVIL CODE, Art. 1819)
Creditors of partnership preferred in partnership TITLE EFFECT
property & may attach partner's share in partnership Title in partnership Conveyance passes
assets. (CIVIL CODE, Art. 1827) name, Conveyance in title but partnership
partnership name can recover if:
Power of Partner as an Agent of the Conveyance was not
Partnership (Art. 1818) in the usual way of
ACTS EFFECT business, or
Acts for carrying on in Every partner is an Buyer had knowledge
the usual way the agent and may of lack of authority
business of the execute acts with
partnership binding effect In no case may the
partnership recover if
title was passed to a
Except: when he has
third person as a
no authority and 3rd
transferee in good
person has knowledge
faith. (De Leon, 2019)
of lack of authority
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Title in partnership Conveyance does not collecting of assets previously demandable. (Idos v.
name, Conveyance in pass title but only Court of Appeals, G.R. No. 110782)
partner's name equitable interest,
unless: Termination is that point when all partnership
Conveyance was not affairs are completely wound up and finally settled.
in the usual way of It signifies the end of the partnership life. (Idos v.
business, or Court of Appeals, G.R. No. 110782)
Buyer had knowledge
of lack of authority 1. CAUSES OF DISSOLUTION (CIVIL
Title in name of 1 or Conveyance passes CODE, Art. 1830)
more partners, title but partnership
Conveyance in name if can recover if: Causes of Dissolution
partner/partners in Conveyance was not i. Without violation of the agreement between the
whose name title in the usual way of partners
stands business, or a. By the termination of the definite term/
Buyer had knowledge particular undertaking specified in the
of lack of authority agreement
b. By the express will of any partner, who
Although the parcel of must act in good faith, when no definite
land really belongs to term or particular undertaking is specified
the partnership, it is c. By the express will of all the partners who
registered in the name have not assigned their interests to be
of a partner and the charged for their separate debts, either
record does not before or after the termination of any
disclose the right of specified term or particular undertaking
the partnership. In d. By the bona fide expulsion of any partner
such a case, the title is from the business in accordance with
conveyed if the power conferred by the agreement
partner sold the land in ii. In contravention of the agreement between the
his own name to a partners, where the circumstances do not
third person, to the permit a dissolution under any other provision
same effect as in of Article 1830, by the express will of any
paragraph 1. (De partner at any time
Leon, 2019) iii. By any event which makes it unlawful for
Title in name of Conveyance will only business to be carried on/for the members to
1/more/all partners or pass equitable interest carry it on for the partnership
3rd person in trust for iv. Loss of specific thing promised by partner
partnership, before its delivery
Conveyance executed v. Death of any partner
in partnership name if vi. Insolvency of a partner/partnership
in name of partners vii. Civil interdiction of any partner
Title in name of all Conveyance will pass viii. Decree of court under Art. 1831.
partners, Conveyance title
in name of all partners If a partnership has no fixed term, then it is a
partnership at will and can be dissolved by the
will of any partner. However, such partner must be
C. DISSOLUTION AND WINDING UP in good faith, otherwise, he will be liable for
damages. Among partners, mutual agency arises
and the doctrine of delectus personae allows them
Dissolution is the change in the relation of the
to have the power, but not necessarily the right, to
partners caused by any partner ceasing to be
dissolve the partnership (Ortega v. Court of
associated in the carrying on of the business;
Appeals, G.R. 109248).
partnership is not terminated but continues until the
winding up of partnership affairs is completed. (CIVIL
Grounds for dissolution by decree of court
CODE, Art. 1828)
(CIVIL CODE, Art. 1831):
i. Partner declared insane in any judicial
Winding up is the process of settling the business
proceeding or shown to be of unsound mind
or partnership affairs after dissolution, which
includes the paying of previous obligations,
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ii. Incapacity of partner to perform his part of the Situation 1

partnership contract (1) Had extended credit to partnership
iii. Partner guilty of conduct prejudicial to business prior to dissolution; and
of partnership (2) Had no knowledge/notice of
iv. Willful or persistent breach of partnership dissolution
agreement or conduct which makes it Situation 2
reasonably impracticable to carry on (1) Did not extend credit to
partnership with him partnership;
v. Business can only be carried on at a loss (2) Had known partnership prior to
vi. Other circumstances which render dissolution dissolution; and
equitable (3) Had no knowledge/notice of
vii. Upon application by purchaser of partner's dissolution/fact of dissolution not
interest: advertised in a newspaper of
a. After termination of specified general circulation in the place
term/particular undertaking where partnership is regularly
b. Anytime if partnership at will when interest carried on
was assigned/charging order issued
c. Post Dissolution (CIVIL CODE,
2. EFFECTS OF DISSOLUTION Art. 1834)
a. Authority of Partner to Bind Partner cannot bind the partnership anymore

Partnership after dissolution:
i. Where dissolution is due to unlawfulness to
General rule: Authority of partners to bind carry on with business (except: winding up of
partnership is terminated. (CIVIL CODE, Art. 1832) partnership affairs)
ii. Where partner has become insolvent
Exceptions: iii. Where partner unauthorized to wind up
1. To wind up partnership affairs partnership affairs, except by transaction with
2. Complete transactions not finished (CIVIL CODE, one who:
Art. 1834)
Situation 1
i) Had extended credit to partnership
b. Qualifications
prior to dissolution, and
ii) Had no knowledge/notice of
1. With respect to Partners (CIVIL CODE, Art.
dissolution; or
1833)
Situation 2
Authority of partners to bind partnership by new
i) Did not extend credit to partnership
contract is immediately terminated when
prior to dissolution
dissolution is not due to act, death, or
ii) Had known partnership prior to
insolvency (ADI) of a partner.
dissolution
iii) Had no knowledge/notice of
If due to ADI, partners are liable as if
dissolution/fact of dissolution not
partnership not dissolved, when the following
advertised in a newspaper of general
concur:
circulation in the place where
a. If cause is act of partner, acting partner
partnership is regularly carried on
must have knowledge of such dissolution;
and
b. If cause is death or insolvency, acting
partner must have knowledge/ notice. 3. RIGHTS OF PARTNERS UPON
DISSOLUTION
2. With respect to Persons not Partners (CIVIL
CODE, Art. 1834) General rule: Dissolution does not discharge
Partner continues to bind partnership even after existing liability of partner
dissolution in following cases:
a. Transactions in connection to winding up Exceptions: Except by agreement between:
partnership affairs/completing unfinished 1. The partner and himself
transactions 2. The person/partnership continuing the business
b. Transactions which would bind partnership 3. Partnership creditors (CIVIL CODE, Art. 1835)
if not dissolved, when the other party:
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a. Rights of Partner where

Dissolution not in d. Settlement of Accounts
Contravention of Agreement between Partners
Assets of the partnership
1. Apply partnership property to discharge 1. Partnership property (including goodwill)
liabilities of partnership 2. Contributions of the partners (CIVIL CODE, Art.
2. Apply surplus, if any, to pay in cash the net 1839 [1])
amount owed to partners
Order of Application of Assets
b. Rights of Partner where 1. Partnership creditors
Dissolution in Contravention of 2. Partners as creditors
3. Partners as investors—return of capital
Agreement
contribution
4. Partners as investors—share of profits if any
(CIVIL CODE, Art. 1839 [2])
A. Partner who did not cause dissolution
wrongfully The partners will contribute the amount necessary
i. Apply partnership property to discharge to satisfy the liabilities based on the rules for
liabilities of partnership distribution of profits and losses in Art. 1797 (CIVIL
ii. Apply surplus, if any to pay in cash the net CODE, Art. 1839 [4]). Even the individual property of
amount owed to partners a deceased partner shall be liable for such
iii. Indemnity for damages caused by partner contributions (CIVIL CODE, Art. 1839 [7]).
guilty of wrongful dissolution
iv. Continue business in same name during
agreed term
4. WHEN BUSINESS OF DISSOLVED
v. Possess partnership property if business is PARTNERSHIP IS CONTINUED
continued
B. Partner who wrongly caused dissolution Effects:
i. If business not continued by others 1. Creditors of old partnership are also creditors of
a. Apply partnership property to the new partnership, which continues the
discharge liabilities of partnership business of the old one w/o liquidation of the
b. Receive in cash his share of surplus partnership affairs (CIVIL CODE, Art.1840)
less damages caused by his wrongful 2. Creditors have an equitable lien on the
dissolution consideration paid to the retiring /deceased
ii. If business continued by others partner by the purchaser when
a. Have the value of his interest at time of retiring/deceased partner sold his interest w/o
dissolution ascertained and paid in final settlement with creditors (CIVIL CODE, Art.
cash/secured by bond 1840)
b. Be released from all existing/future
partnership liabilities The retired or deceased partner or his legal
representatives may
c. Rights of Injured Partner where a. Have the value of his interest ascertained
as of the date of dissolution
Partnership Contract is
b. May receive as ordinary creditor the value
Rescinded on Ground of of his share in the dissolved partnership
Fraud/Misrepresentation by with interest or profits attributable to use of
One Party (CIVIL CODE, Art. 1838) his right, at his option (CIVIL CODE, Art.
1841)
1. Right to lien on surplus of partnership property
after satisfying partnership liabilities 5. PERSONS AUTHORIZED TO WIND
2. Right to subrogation in place of creditors after UP
payment of partnership liabilities
3. Right of indemnification by guilty partner 1. Partners designated by the agreement
against all partnership debts & liabilities 2. In absence of agreement, all partners who have
not wrongfully dissolved the partnership
3. Legal representative of last surviving partner
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Unless otherwise agreed, the partners who have not 2. GENERAL PARTNERS V. LIMITED
wrongfully dissolved the partnership or the legal PARTNERS
representative of the last surviving partner, not
insolvent, has the right to wind up the partnership GENERAL LIMITED
affairs, provided, however, that any partner, his legal Personally liable for Liability extends only
representative or his assignee, upon cause shown, partnership to his capital
may obtain winding up by the court (Primelink obligations (CIVIL contributions (CIVIL
Properties and Development Corp. v. Lazatin- CODE, Art. 1816) CODE, Art. 1843)
Magat, G.R. No. 167379). When manner of No participation in
management not management (CIVIL
A partner’s share cannot be returned without first agreed upon, all have CODE, Art. 1848)
dissolving and liquidating the business for the an equal right in the
partnership’s outside creditors have preference over management of the
the enterprise’s assets. The firm’s property cannot business (CIVIL CODE,
be diminished to their prejudice. (Magdusa v. Art. 1803)
Albaran, G.R. No. L-17526) Contribute cash, Contribute cash or
property or industry property only, not
Due to its separate juridical personality from the (CIVIL CODE, Art. 1767) industry (CIVIL CODE,
individual partners, it is thus the partnership – Art. 1845)
having been the recipient of the capital contributions
Proper party to Not proper party to
– which must refund the equity of retiring partners.
proceedings by/ proceedings by/
Such duty does not pertain to partners who
against partnership against partnership
managed the business. The amount to be refunded
(CIVIL CODE, Art. 1866) (CIVIL CODE, Art. 1866)
consistent with the partnership being a separate and
Interest not assignable Interest is freely
distinct entity, must necessarily be limited to the
w/o consent of other assignable (CIVIL
firm’s total resources. It can only pay out what it has
partners (CIVIL CODE, CODE, Art. 1859)
for its total assets. But this is subject to the priority
Art. 1804)
enjoyed by outside creditors. After all the (said)
Name may appear in Name must not
creditors have been paid, whatever is left of the
firm name (CIVIL CODE, appear in firm name
partnership assets becomes available for the
Art. 1815) (CIVIL CODE, Art. 1846)
payment of partners’ shares. (Villareal v. Ramirez,
G.R. No. 144214) Prohibition against No prohibition against
engaging in business engaging in business
(CIVIL CODE, Art. 1789,
D. LIMITED PARTNERSHIP Art. 1808)
Retirement, death, Does not have same
1. CHARACTERISTICS OF LIMITED insolvency, insanity effect; rights
PARTNERSHIP dissolves partnership transferred to legal
(CIVIL CODE, Art. 1830) representative (CIVIL
a. Formed by compliance with statutory CODE, Art. 1861)
requirements (CIVIL CODE, Art. 1843)
b. One or more general partners control the
3. REQUIREMENTS FOR FORMATION
business (CIVIL CODE, Art. 1843)
c. One or more general partners and one or more OF LIMITED PARTNERSHIP
limited partners. (CIVIL CODE, Art. 1843) Limited
partners (i) contribute cash or other property, Certificate/Articles of Limited Partnership, which
but not services (CIVIL CODE, Art. 1845); (ii) must be signed and sworn by the parties, must state
share in the profits but do not participate in the the following matters:
management of the business (CIVIL CODE, Art. a. Name of partnership plus the word "Limited" (or
1848); and (iii) are not personally liable for “Ltd.” – SEC Memorandum Circular 13-2019)
partnership obligations beyond their capital b. Character of business
contributions c. Location of principal place of business
d. May ask for the return of their capital d. Name/place of residence of members
contributions under conditions prescribed by e. Term for partnership is to exist
law (CIVIL CODE, Art. 1857) f. Amount of cash/value of property contributed by
e. Partnership debts are paid out of common fund limited partners
and the individual properties of general partners g. Additional contributions, if any, to be made by
(CIVIL CODE, Art. 1857) limited partner
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h. Time, if agreed upon, to return contribution of ii. Right to inspect/copy books at reasonable
limited partner hour
i. Sharing of profits/other compensation (CIVIL iii. Right to have on demand true and full info
CODE, Art. 1844) of all things affecting partnership
iv. Right to have formal account of partnership
NOTE: If given, the following must also appear in the affairs whenever circumstances render it
Certificate/Articles of Limited Partnership: just and reasonable
a. Right of limited partner to substitute an v. Right to ask for dissolution and winding up
assignee as contributor and the terms of by decree of court
substitution vi. Right to receive share of profits/other
b. Right of partners to admit additional limited compensation by way of income
partners vii. Right to receive return of contributions
c. Right of one or more limited partners to priority provided the partnership assets are in
over other limited partners as to contributions excess of all its liabilities (CIVIL CODE, Art.
and compensation 1851)
d. Right of remaining partners to continue the
business on death, retirement, civil interdiction, 6. REQUISITES FOR RETURN OF
insanity, or insolvency of a general partner CONTRIBUTION OF LIMITED
e. Right of limited partner to demand and receive PARTNER
property other than cash in return for his i. All liabilities of partnership have been
contribution paid/if not yet paid, at least sufficient to
cover them
Certificate must be filed with the SEC. ii. Consent of all members has been obtained
NOTE: To validly form a limited partnership, all that Exception: The return of the contribution
is required is substantial compliance in good faith may be rightfully demanded.
with all the requirements under Art. 1844 as
enumerated above. If no substantial compliance, iii. Certificate is cancelled/amended as to set
then the firm becomes a general partnership as far forth withdrawal /reduction of contribution
as third persons are concerned (but as amongst the (CIVIL CODE, Art. 1857)
partners, still limited) (Jo Chung Cang v. Pacific
Commercial Co., 45 Phil 142)
7. LIABILITIES OF A LIMITED
PARTNER
4. CONSENT/RATIFICATION OF ALL a. To the Partnership
LIMITED PARTNERS NEEDED 1. For the difference between his
contribution as actually made and
i. Any act in contravention of the certificate that stated in the certificate as
ii. Any act which would make it impossible to having been made, and
carry on the ordinary business of the 2. For any unpaid contribution which
partnership he agreed in the certificate to
iii. Confess judgment against partnership make in the future time (CIVIL
iv. Possess partnership property/assign rights CODE, Art. 1858)
in specific partnership property other than b. As a Trustee for the Partnership
for partnership purposes 1. For the specific property stated in
v. Admit person as general partner the certificate as contributed by
vi. Admit person as limited partner - unless him but which he had not
authorized in certificate contributed;
vii. Continue business with partnership 2. For the specific property of the
property on death, retirement, civil partnership which had been
interdiction, insanity, or insolvency of gen wrongfully returned to him; and
partner unless authorized in certificate 3. Money or other property wrongfully
(CIVIL CODE, Art.1850) paid or conveyed to him on
account of his contribution. (CIVIL
5. RIGHTS OF LIMITED PARTNERS CODE, Art. 1858)
i. Right to have partnership books kept at

principal place of business
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j. The members desire to make a change

8. DISSOLUTION OF LIMITED in any other statement in the certificate
PARTNERSHIP in order that it shall accurately
represent the agreement among them.
Priority in Distribution of Assets .(CIVIL CODE, Art. 1864)
a. Those due to creditors, including
limited partners The writing to amend a certificate:
b. Those due to limited partners in a. Shall conform to the requirements of Article
respect of their share in 1844 as far as necessary to set forth clearly
profits/compensation the change in the certificate which it is
c. Those due to limited partners of return desired to make; and
of capital contributed b. Must be signed and sworn to by all the
d. Those due to general partner other members including the new members if
than capital and profits some are added; in case of substitution, the
e. Those due to general partner in respect assigning limited partner must also signed
to profits by the assigning limited partner.
f. Those due to general partner for return The cancellation or amendment must be recorded in
of capital contributed (CIVIL CODE, Art. the SEC.( CIVIL CODE, Art.1864)
1863)
NOTE: Any person who suffers loss by reliance on
9. AMENDMENT OF CERTIFICATE OF false statement in certificate may hold liable for
damages any party to the certificate who knew the
PARTNERSHIP
statement to be false at the time the latter signed the
certificate or came to know such falsity
Certificate Must Be Cancelled When:
subsequently but within sufficient time before
a. Partnership is dissolved
reliance to enable such party to cancel or amend the
b. There cease to be limited Partners (
certificate or file the proper petition for such purpose
CIVIL CODE, Arts.1864 & 1865)
(under Art. 1865). (CIVIL CODE, Art. 1847; Walraven
v. Ramsay, 55 N.W.d 853)
Certificate of Partnership Must Be
Amended When:
a. There is a change in the name of the A general partner’s DIIC (Death, Insolvency,
partnership or in the amount or Insanity, or Civil interdiction) dissolves the
character of the contribution of any partnership unless the business is continued by the
limited partner; surviving general partners under a right stated in the
b. A person is substituted as a limited certificate or with their common (i.e., all) consent
partner; (CIVIL CODE, Art. 1860). Still, even if allowed under
c. An additional limited partner is the certificate or consented to by all, there must be
admitted; an amendment further to Arts. 1864 and 1865.
d. A person is admitted as a general Otherwise, limited partners will not be able to avail
partner; of the protection of the law as regards liability. The
e. A general partner retires, dies, partnership will be considered general. (Lowe v.
becomes insolvent or insane, or is Arizona Power & Light Co., 427 P. d. 366)
sentenced to civil interdiction and the
business is continued under Article A limited partner shall not become liable as a
1860; general partner, unless in addition to the exercise of
f. There is a change in the character of his rights and powers as a limited one, he takes part
the business of the partnership; in the control (and management) of the business
g. There is a false or erroneous statement (CIVIL CODE, Art. 1848; Holzman v. Escamilla, 195
in the certificate; P. d. 833, 1948)
h. There is a change in the time as stated
in the certificate for the dissolution of A person may be general and limited at the same
the partnership or for the return of a time provided it is stated in the certificate. He shall
contribution; have all the powers, rights, and restrictions of a
i. A time is fixed for the dissolution of the general partner; but with respect to his capital
partnership, or the return of a contribution, his right against the other members of
contribution, no time having been the firm would be that of a limited partner (Art. 1853).
specified in the certificate, or
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General rule: A limited partner may also loan

money to and transact other business with the firm.
Exceptions: Except that he cannot:

1. Receive or hold as collateral any
partnership property; or
2. Receive from a general partner or from the
firm any payment, conveyance, release if at
that time assets of the firm are not sufficient
to discharge liabilities to outside creditors.
Any violation would be fraud on such creditors (CIVIL
CODE, Art. 1854).
Liability of a Limited Partner Whose Surname

Appears in the Partnership Name
General Rule: A limited partner whose surname

appears in the partnership name is liable as a
general partner to the partnership creditors who
extended credit without actual knowledge that he is
not a general partner.
Exceptions:
1. If the surname is also the surname of a
general partner; or
2. If prior to the time the partner became a
limited partner, the business has been
carried under such name. (CIVIL CODE, Art.
1846)
-- end of topic --
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VIII. AGENCY A. DEFINITION OF AGENCY
By the Contract of Agency, a person binds himself

TOPIC OUTLINE UNDER THE SYLLABUS to render some service or to do something in
representation or on behalf of another, with the
A. DEFINITION OF AGENCY consent or authority of the latter.
1. Characteristics (CIVIL CODE, ART. 1868)
2. Essential Elements
B. NATURE, FORMS AND KINDS OF AGENCY 1. CHARACTERISTICS

1. Nature of Relationship a. Consensual: perfected by mere
2. Other Classifications consent; (CIVIL CODE, Art. 1869, Art.
3. Forms of Agency 1870) The basis for agency is
4. Kinds of Agency representation; on principal’s part,
5. How Agency is Revoked there must be an intention to appoint,
or such intention is naturally inferable
C. OBLIGATIONS OF THE AGENT from words or actions; on part of the
1. General Obligations agent, there must be an intent to
2. Effects of Agent’s Acts to Principal’s accept the appointment and act on it; in
Liability the absence of either, there is no
3. Appointment of Sub-Agent agency. (Dominion Insurance Corp. v.
4. Responsibility of Two (2) or More Agents CA, 376 SCRA 239)
Appointed Simultaneously b. Nominate: it has its own name and the
5. Obligation Rules for Commission Agents rules provided in Title X, Book IV of the
Civil Code will find preferential
D. OBLIGATIONS OF THE PRINCIPAL application against the general
1. Obligations of the Principal to the Agent provisions on Obligations and
2. Rules on Liability of Two (2) or more Contracts; it will be an agency whether
Principals or not parties understood the exact
3. Principal’s Liabilities for Expenses nature of the relation. (Doles v.
4. Agency by Estoppel Angeles, G.R. No. 149353)
5. Principal's Revocation of the Agency c. Preparatory: The object of agency is for
6. Principal’s Liability for Damages despite the agent to enter on behalf of the
Revocation principal and within the scope of his
authority into juridical acts with third
E. MODES OF EXTINGUISHMENT parties (Rallos v. Felix Go Chan &
1. How Agency is Extinguished Sons Realty Corp., G.R. No. L-24332)
2. Other Modes d. Principal: it does not depend on
3. Exceptions to Extinguishment by Death another contract for its existence and
validity; (Doles v. Angeles, G.R. No.
149353)
e. Unilateral/Bilateral and Primarily
Onerous:
1. Unilateral: if contract is gratuitous
or it creates obligations for only
one party (i.e., the agent) (Urban
Bank, Inc. v. Peña, G.R. No.
145817, 145822, 162562)
2. Bilateral: if contract is for
compensation or gives rise to
reciprocal rights and obligations
(Urban Bank, Inc. v. Peña, G.R.
No. 145817, 145822, 162562)
NOTE: Agency is presumed to be for compensation,

unless there is proof to the contrary. (CIVIL CODE,
Art. 1875)
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Basis: Representation B. NATURE, FORMS, AND KINDS OF

The acts of the agent on behalf of the principal within AGENCY
the scope of his authority produce the same legal
and binding effects as if they were personally done 1. NATURE OF RELATIONSHIP
by the principal. (Litonjua, Jr. v. Eternit Corp., G.R.
No. 144805) Since it is a contract, there must be a meeting of the
minds (i.e., consent) as to object and cause. (CIVIL
The distinguishing features of agency are its CODE, Art. 1868)
representative character & its derivative authority.
(Rallos v. Felix Go Chan & Sons Realty Corp., Gr. Exception to Contractual Nature
No. L-24332) When the agency is created by operation of law
(See Part VIII on “Agency by Operation of Law”)
Purpose
Extend the personality of the principal through the NOTE: An illegal termination of agency does not
facility of the agent. (Litonjua, Jr. v. Eternit Corp., justify reinstatement of the agent. The agency
G.R. No. 144805) cannot be compelled by the courts to be reinstated
because such relationship can only be given effect
Parties to the Contract of Agency with the consent of the principal (Orient Air Services
1. Principal v. CA, G.R. No. 76931). At most, the principal may
i. May be a natural or a juridical person be held liable for damages.
ii. Must be capacitated. (CIVIL CODE, Art.
1327) Acts that cannot be done through an agent
General rule: If a person is capacitated to 1. Personal Acts (making of a will; exercise of
act in his own right, he can act through an right of suffrage; statements required to be
agent. made under oath)
NOTE: The agent is not liable where he 2. Criminal Acts or Acts Not Allowed by Law
was ignorant of the principal’s incapacity. (ownership of private agricultural lands by
(CIVIL CODE, Arts. 1897 & 1899 ) aliens through an agent; persons prohibited to
2. Agent acquire a property by reason of position or
i. Like the principal, the agent may be either relation to the person cannot do the same
a natural or juridical person, and must be through the mediation of another; participation
capacitated. in the commission of a crime – a person cannot
ii. One who is absolutely incapacitated (e.g., escape punishment on the ground that he was
insane persons) cannot be an agent. merely an agent; attending meetings of board of
directors/trustees of a corporation)
NOTE: From the time the agent acts or transacts the
business for which he has been employed in Nature of Relationship between Principal and
representation of another, a third party is added to Agent
the agency relationship – the party with whom the Fiduciary – based on trust & confidence
business is transacted (De Leon, 2010). i. Agent is estopped from asserting an
interest adverse to his principal’s, whether
2. ESSENTIAL ELEMENTS (CROW) his own or that of an adverse party
(Severino v. Severino, G.R. No. 18058;
a. Consent of the parties to establish the CIVIL CODE, Art. 1435)
relationship; ii. Agent must not use or disclose secret
b. Object or subject matter of the contract information (CIVIL CODE, Art. 1889)
is the execution of a juridical act in iii. Agent must give notice of material facts
relation to third persons; (CIVIL CODE, Art. 1889)
c. Agent acts as a Representative and not
for himself; and NOTE: Theory of Imputed Knowledge
d. Agent acts Within the scope of his General Rule: Knowledge of the agent is imputed
authority. (Rallos v. Felix Go Chan & to the principal even though the agent never
Sons Realty Corp., Gr. No. L-24332) communicated it to his principal (Sunace
International Management Services, Inc. v. NLRC,
G.R. No. 161757)
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Exceptions: Distinction between Agency to Sell and Sale

1. Where the interests of the agent are adverse to (Quiroga v. Parsons, G.R. No. 11491; Spouses
those of the principal; Viloria v. Continental Airlines, G.R. No. 188288)
2. The agent’s duty is not to disclose the AGENCY TO SELL SALE
information, as where he is informed by way of Agent receives the Buyer receives the
confidential information. goods as the principal’s goods as owner
3. Agent acts in bad faith or where the person goods
claiming the benefit of the rule colludes with the Agent delivers the Buyer pays the price
agent to defraud the principal (CIVIL CODE, Art. proceeds of the sale
1898)
Agent can return the Buyer, as a general
object in case he is rule, cannot return the
Distinction between Agency and Guardianship
unable to sell the same object sold
AGENCY GUARDIANSHIP
to a third person
Agent represents a A guardian represents
Agent in dealing with Buyer can deal with the
capacitated person an incapacitated
the thing received is thing as he pleases,
person.
bound to act according being the owner
Agent is appointed by Guardian is appointed
to the instructions of his
the principal and can by the court and stands
principal
be removed by the in loco parentis.
latter.
Agent is subject to the Guardian is not subject Distinction between Agency and Contractor
directions of the to the directions of the (Shell v. Firemen’s Ins. Co., G.R. No. L-8169)
principal. ward but must act for AGENT INDEPENDENT
the benefit of the latter CONTRACTOR
Agent can make the Guardian has no power Represents his Employed by the
principal personally to impose personal principal employer
liable. liability on the ward.
Acts under the Acts according to his
principal’s control and own method
Distinction between Agency and Judicial instruction
Administration Principal is liable for Employer not liable for
AGENCY JUDICIAL torts committed by the torts committed by the
ADMINISTRATION agent within the scope independent
Agent is appointed by Judicial administrator is of his authority (Civil contractor. (Rule VIII,
the principal. appointed by the court. Code, Art. 1897, Art. Sec. 9(b), Omnibus
1899) Implementing Rules of
Agent represents the Judicial administrator the Labor Code of the
principal. not only represents the Philippines)
court but also the heirs
and creditors of the
estate. Distinction between Agency and Partnership
Agent does not file a Judicial administrator AGENCY PARTNERSHIP
bond. files a bond. An agent must submit A co-partner is not
to the principal’s right subject to co-partner’s
Agent is controlled by Judicial administrator’s to control right to control, unless
the principal through acts are subject to there is an agreement
the arrangement. specific orders from the to that effect
court. The agent assumes no The partner binds not
personal liability where only the firm members
Distinction between Agency and Lease he acts within the but himself as well
scope of his authority
AGENCY LEASE OF
PROPERTY
The agent takes his The profits belong to all
Agent is controlled by Lessee is not
agreed share of profits the partners as
the principal. controlled by the
not as owner but as an common proprietors in
lessor.
agreed measure of agreed proportions
Agency may involve Lease of property
compensation for his
things other than involves property.
services
property.
Agent can bind the Lessee cannot bind the
principal. lessor.
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2. OTHER CLASSIFICATIONS OF through an agent – the agent’s authority must be in

AGENCY writing, otherwise the sale is void) (CIVIL CODE, Art.
1874)
a. As to Manner of Creation
How Agency May be Constituted from Side of
1. Express – agent has been explicitly authorized Third Parties:
by the principal, either orally or in writing. (CIVIL 1. Agency is not presumed to exist – persons
CODE, Art. 1869) dealing with an agent must ascertain not only
2. Implied – agency is implied from the acts of the the fact of agency, but also the nature and
principal, from his silence, or lack of action, or extent of his authority – he must require the
his failure to repudiate the agency knowing that presentation of the power of attorney, or the
another person is acting on his behalf without instructions as regards the agency. (Salvador v.
authority, or from the acts of the agent which Rabaja , G.R. No. 199990)
carry out the agency. (CIVIL CODE, Art. 1869) 2. Agency by Estoppel with Respect to Third
Parties – one who clothes another with
apparent authority as his agent, and holds him
b. As to Character
out to the public as such, cannot be permitted
to deny the authority of such person to act as
1. Gratuitous – agent receives no compensation
his agent, to the prejudice of innocent third
for his services (CIVIL CODE, Art. 1875)
parties dealing with such person in good faith
2. Onerous – agent receives compensation for his
and in the following pre-assumptions or
services (CIVIL CODE, Art. 1875)
deductions, which the law expressly directs to
be made from particular facts, are deemed
c. As to Extent of Business of the conclusive. (Macke v. Camps, G.R. No. 2962)
Principal
Compensation
1. General – agency comprises all the business of General Rule: Agency is presumed to be for
the principal (CIVIL CODE, Art. 1876) compensation, unless there is proof to the contrary.
2. Special – agency comprises one or more (CIVIL CODE, Art. 1875)
specific transactions (CIVIL CODE, Art. 1876)
The agent does not have to prove that the agency is
d. As to Authority Conferred for compensation.
1. Couched in general terms – only acts of Exception: The presumption that the agency is for
administration (CIVIL CODE, Art. 1877) compensation is prima facie, meaning it may be
2. Couched in specific terms – only the disproved by contrary evidence. (CIVIL CODE, Art.
performance of a specific act/s (CIVIL CODE, Art. 1875)
1876). If a special power of attorney is granted,
it will empower the agent to render acts of Broker
dominion to the extent granted (CIVIL CODE, Art. Negotiates contracts relative to property in behalf of
1878_ others and for a compensation/fee. (Litonjua v.
Eternit Corp., G.R. No. 144805)
e. As to Nature and Effects
Difference from a Broker
1. Ostensible or Representative – agent acts in A broker brings parties together and parties agree
the name and representation of the principal to enter into a contract. A broker is not necessarily
2. Simple or Commission – agent acts in his own an agent of either party, and negotiate contracts
name but for the account of the principal. (De relative to property in behalf of others and for a
Leon, 2019) compensation/fee. He is described merely as a “go-
between” between the parties in Litonjua v. Eternit
3. FORMS OF AGENCY Corp. (G.R. No. 144805), and does not have
authority to bind the parties.
General Rule: Appointment of an agent may be oral
or written; no formal requirement (CIVIL CODE, Art. Thus, in Litonjua, the Court said that a real estate
1869) broker (not an agent) is one who negotiates the sale
of real properties – his authority is to find a buyer (or
Exception: When the law requires a specific form seller) who wishes to purchase (or sell) a property
(e.g., sale of a piece of land or any interest therein on terms agreed upon by the parties. He has no
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authority to bind the parties in the contract of sale. Requisites for Principal to be bound by act of
His authority is to find a buyer (or seller) and not to Agent (CIVIL CODE, Art. 1897)
sell the property. Thus, there is no need of a special 1. The agent must act on behalf of the principal
power of attorney under Art 1878. 2. The agent must act within the scope of his
authority
When Broker Entitled to Compensation:
1. Whenever he brings to his principal a party who When Principal is not bound by act of Agent
is able and willing to take the property, and General Rule: The agent acts without or beyond the
enter into a valid contract upon the terms scope of his authority in the principal’s name (CIVIL
named by the principal, although the particulars CODE, Art. 1897, 1910, Art. 1403 (1))
may be arranged and the matter negotiated and
completed between the principal and the Exceptions:
purchaser directly (Macondray & Co., Inc. v. 1. So far as third persons are concerned, an act is
Sellner, G.R. No. 9184) deemed to be within the scope of the agent's
2. A broker is not entitled to commission for authority, if such act is within the terms of the
unsuccessful efforts. (Guardex Enterprises v. power of attorney, as written, even if the agent
NLRC, G.R. No. 66541) has in fact exceeded the limits of his authority
3. The broker should be paid his commission according to an understanding between the
where he is the efficient procuring cause in principal and the agent; (CIVIL CODE, Art. 1900)
bringing the sale. (Prats v. CA, G.R. No. L- 2. Where the principal has ratified the acts of the
39822; Manotok Brothers v. CA, G.R. No. agent, expressly or impliedly (CIVIL CODE, Art.
94753) 1910)
Efficient Procuring Cause If an agent acts in his own name, he (and not the
When there is a close proximate and causal principal) is the one bound to the third person. The
connection between the efforts and labor of the principal would not have a right of action in such
agent and the principal’s sale of property. (Manotok case, unless the transaction involves things
Brothers v. CA, G.R. No. 94753) belonging to him (CIVIL CODE, Art. 1883)
Q: Will a broker be paid if the transaction was NOTE: The agent is not deemed to have exceeded
effected after the expiration of his authority? his authority should he perform the agency in a
manner more advantageous to the principal than
A: The broker should be paid his commission where that indicated by him, since he is authorized to do
he is the efficient procuring cause in bringing the such acts as may be conducive to the
sale. He is the efficient procuring cause when there accomplishment of the purpose of the agency. (CIVIL
is a close proximate and causal connection between CODE, Art. 1882)
the efforts and labor of the agent and the principal’s
sale of property. (Manotok Brothers v. CA, G.R. No. In the absence of an agreement to the contrary, a
94753) managing agent (i.e., one entrusted with the care
and management of a business) may enter into
NOTE: “Procuring cause” refers to a cause contracts that he deems reasonably necessary or
originating a series of events which, without break in requisite for the protection of the interests of his
their continuity, resulting in the accomplishment of principal entrusted to his management. (Eurotech v.
the prime objective of the broker’s employment, i.e. Cuizon, G.R. No. 167552)
to produce a purchaser ready, willing, and able to
buy on the owner’s terms. To be regarded as the Forms of Acceptance by Agent
“procuring cause” to be entitled to a commission, a 1. Express - when it is oral or written (CIVIL CODE,
broker’s efforts must have been the foundation on Art. 1870)
which the negotiations resulting in a sale began. 2. Implied - when it can be inferred from the acts
(Medrano v. CA, G.R. No. 150678) of the agent which carry out the agency, or from
his silence or inaction according to the
Law on Double Agency circumstances (CIVIL CODE, Art. 1870)
If two or more persons have appointed an agent for
a common transaction or undertaking, they shall be Between persons who are present – there is
solidarily liable to the agent for all the consequences implied acceptance if the principal delivers his
of the agency (CIVIL CODE, Art. 1915). power of attorney to the agent and the latter
receives it without any objection (CIVIL CODE, Art.
1871)
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CODE, Art.
Between persons who are absent 1876)
General rule: Acceptance not deemed implied from
the silence of the agent. (CIVIL CODE, Art.1872) Nature of Involves No continuity
Service continuity of of service
Exceptions: Authorized service
1. When the principal transmits his power of Extent to May bind his Cannot bind
attorney to the agent who receives it without any Which Agent principal by an his principal in
objection May Bind the act within the a manner
2. When the principal entrusts to him by letter or Principal scope of his beyond or
telegram a power of attorney with respect to the authority, outside the
business in which he is habitually engaged as although it specific acts
an agent, and he did not reply to the letter or may not have which he is
telegram (CIVIL CODE,Art.1872) been the authorized to
subject of any perform
“Present” specific
Generally, “face to face”, but includes people instruction
conversing directly through technology (e.g., over Construction Generally Strictly
the telephone or through a videoconference). of Principal’s considered as construed as
Instructions advisory in they limit the
Q: How is implied acceptance manifested as nature agent’s
between persons who are present and those authority
who are absent?
NOTE: Universal Agent – one employed to do all
A: As between persons who are present, the acts which the principal may personally do, and
acceptance of the agency may be implied if the which he can lawfully delegate to another the power
principal delivers his power of attorney to the agent of doing. (Siasat v. IAC, G. R. No. L-67889)
and the latter receives it without any objection. (CIVIL
CODE, Art. 1871). Meanwhile, as to those who are b. Whether it covers legal matters
absent, the acceptance of the agency cannot be
implied from the silence of the agent, except when Attorney-at-Law vs. Attorney-in-Fact
the principal delivers his power of attorney to the ATTORNEY-AT-LAW ATTORNEY-IN-FACT
agent, who receives it without any objection; or A practitioner in a “An attorney-in-fact is
when the principal entrusts to him by letter or court of law who is simply an agent
telegram a power of attorney in which he is legally qualified to whose authority is
habitually engaged as an agent, and he did not reply prosecute and defend strictly limited by the
to the letter or telegram. (CIVIL CODE, Art. 1872) actions in such court. instrument appointing
him, though he may do
things not mentioned
4. KINDS OF AGENCY in his appointment
necessary to the
a. Based on business or performance of the
transactions encompassed duties specifically
required of him by the
General vs Special Agency power of attorney
GENERAL SPECIAL appointing him, such
BASIS authority necessarily
AGENT AGENT
Scope of All acts Specific acts being implied
Authority connected in pursuance (Philippine Legal
with the of particular Encyclopedia, p. 66)
business or instructions or
employment with NOTE: “His authority is provided in a special power
in which he is restrictions of attorney or general power of attorney or letter of
engaged necessarily attorney. An attorney-in-fact is not necessarily a
(CIVIL CODE,, implied from lawyer.” (Pineda, Legal Ethics, p. 8)
Art. 1876) the act to be
done (CIVIL
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c. Whether it covers acts of • If the contract is open to two (2)

administration or acts of constructions, one of which would uphold
dominion – General Power vs. the intention while the other would
Special Power of Attorney overthrow it, the former is to be chosen.
(Liñan v. Puno, G.R. No. L-9608)
Power of Attorney
Cases Where Special Power of Attorney is
Instrument in writing by which the principal appoints
Necessary
his agent and confers authority to do specific acts
1. To make such Payments as are not usually
on behalf of the principal. Its primary purpose is to
considered as acts of administration;
evidence the agent’s authority to third parties with
2. To Effect novations which put an end to
whom the agent deals (Wee v. De Castro, G.R. No.
obligations already in existence at the time the
176405)
agency was constituted;
NOTE: Article 1878 does not state that the authority
3. To Compromise, to submit questions to
be in writing. As long as the mandate is express,
arbitration, to renounce the right to appeal from
such authority may either be oral or written. The
a judgment, to waive objections to the venue of
requirement under Article 1878 refers to the nature
an action, or to abandon a prescription already
of authorization and not to its form (Patrimonio v.
acquired;
Gutierrez, G.R. No. 187769).
4. To Waive any obligation gratuitously;
5. To Enter into any contract by which the
Construction of Power of Attorney (Olaguer v. ownership of an immovable is transmitted or
Purugganan, Jr., G.R. No. 158907) acquired either gratuitously or for a valuable
consideration;
General rule: Strictly construed to grant only those 6. To Make gifts, except customary ones for
specified powers. charity or those made to employees in the
business managed by the agent;
Exception: When strict construction will defeat the 7. To Loan or borrow money, unless the latter act
very purpose of the power be urgent and indispensable for the
preservation of the things which are under
Ways of Giving Notice of Agency and its Effect administration;
1. By special information - the person appointed 8. To Lease any real property to another person
as agent is considered as such with respect to for more than one year;
the person to whom it was given. (CIVIL CODE, 9. To Bind the principal to render some service
Art. 1873) without compensation;
2. By public advertisement - the agent is 10. To Bind the principal in a contract of
considered as such with regard to any person. partnership;
(CIVIL CODE, Art. 1873) 11. To Obligate the principal as a guarantor or
surety;
Agency Couched in General Terms 12. To Create or convey real rights over immovable
Covers only mere acts of administration (not acts of property;
dominion) even if: 13. To Accept or repudiate an inheritance;
1. The principal should state that he withholds no 14. To Ratify or recognize obligations contracted
power before the agency;
2. The agent may execute such acts as he may 15. Any Other act of strict dominion. (CIVIL CODE,
consider appropriate Art. 1878)
3. The agency should authorize a general and
unlimited management (CIVIL CODE, Art.1877) NOTE: A Special Power of Attorney is not required
to execute a Deed of Partition because partition is a
How to Construe Contracts of Agency conveyance of real property. (Heirs of Ureta v. Heirs
Contracts of agency, as well as general powers of of Ureta, G.R. No. 165748)
attorney, must be interpreted in accordance with the
language used by the parties. NOTE: A Special Power of Attorney is strictly
• The real intention of the parties is primarily construed. Hence, the act under Article 1878 sought
determined from the language used and to be authorized must be clearly stated.
gathered from the whole instrument.
• In case of doubt, resort must be had to the Accordingly, the power of administration does not
situation, context, and relations of the include acts of disposition or encumbrance, which
parties. The intention of the parties must are acts of strict ownership. Similarly, an authority to
be sustained, not defeated.
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sell or dispose does not include the authority to Agency by Estoppel

administer. (Aggabao v. Parulan, G.R. No. 165803) There is really no agency at all, but the alleged
agent seemed to have apparent or ostensible,
NOTE: A Special Power of Attorney must express although not real, authority to represent another.
the powers of the agent in clear and unmistakable (Country Bankers Insurance Corporation v. Keppel
language for the principal to confer the right upon an Cebu Shipyard, et. al., G.R. No. 166044)
agent (Yoshizaki v. Joy Training Center of Aurora,
Inc., G.R. No. 174978) NOTE:
• If a person specially informs another or
However, Article 1878 does not state that the states by public advertisement that he has
authority be in writing. As long as the mandate is given a power of attorney to a third person,
express, such authority may either be oral or written. the latter thereby becomes a duly
The requirement under Article 1878 refers to the authorized agent, in the former case with
nature of authorization and not to its form respect to the person who received the
(Patrimonio v. Gutierrez, G.R. No. 187769). special information, and in the latter case
with regard to any person (CIVIL CODE,
The special power of attorney can be included in the Art.1873).
general power when it specifies therein the act or • Even when the agent has exceeded his
transaction for which the special power is required. authority, the principal is solidarily liable
with the agent if the former allowed the
Q: A borrowed money from C on behalf of B latter to act as though he had full powers
without B’s knowledge. C sought to recover (CIVIL CODE, Art. 1911)
from A, but to no avail. He thereafter sent several
demand letters to B asking for the payment. B Requisites of Agency by Estoppel
now contends that he should not be held liable 1. The principal manifested a representation of the
because there was no loan between him and C agent’s authority or knowingly allowed the
since he did not give a special power of attorney agent to assume such authority;
for the borrowing of money. Is B correct? 2. The third person, in good faith, relied upon such
representation; and
A: Yes. Art. 1878 of the NCC provides that a special 3. Relying upon such representation, such third
power of attorney is necessary in order to loan or person has changed his position to his
borrow money, unless the latter act be urgent and detriment (Country Bankers Insurance
indispensable for the preservation of the things Corporation v. Keppel Cebu Shipyard, et. al.,
which are under administration. G.R. No. 166044)
Powers not included in the power to mortgage

1. To sell (CIVIL CODE, Art. 1879)
2. To execute a second mortgage
3. To mortgage for the agent or any 3rd person’s
benefit, unless clearly indicated
Powers not included in the power to

compromise
Submission to arbitration (CIVIL CODE, Art. 1880)
Rationale:
1. A principal may authorize his agent to
compromise because of his confidence in the
latter’s discretion to protect his rights and obtain
for him the best deal.
2. If the transaction were left in the hands of an
arbitrator, said arbitrator may not enjoy the trust
of the principal.
3. The agent must act within the scope of his
authority. He may do such acts as may be
conducive to the accomplishment of the
purpose of the agency. (CIVIL CODE, Art. 1881)
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Distinction between Agency by Estoppel and cause which extinguishes the agency, is valid
Implied Agency and shall be fully effective with respect to third
AGENCY BY IMPLIED persons who may have contracted with him in
BASIS
ESTOPPEL AGENCY good faith (CIVIL CODE, , Art. 1931).
Existence of No agency at There is an 5. If the agent dies, the heirs must notify the
actual all actual agency principal thereof, and in the meantime adopt
agency such measures as the circumstances may
Reliance by Can be Such reliance demand in the interest of the latter (CIVIL CODE,
3rd persons invoked only is not needed, Art. 1932)
by a 3rd since the
person who in agent is a real 5. HOW AGENCY IS REVOKED
good faith agent
relied on the 1. Principal may revoke the agency (express or
conduct of the implied) at will and compel agent to return the
principal in document evidencing the agency. (CIVIL CODE,
holding the Art. 1920)
agent out as 2. Agency has been entrusted for purpose of
being contracting with specified persons – revocation
authorized will not prejudice specified persons if they were
Nature of An agent by An agent by not notified. (CIVIL CODE, Art. 1921)
Authority estoppel has implied 3. If the agent had general powers – revocation
none of the appointment does not prejudice third persons who acted in
rights of an has all the good faith and without knowledge of the
agent, except rights and revocation. Notice of revocation in a newspaper
where the liabilities of an of general circulation is a sufficient warning.
principal’s agent, i.e., (CIVIL CODE, Art. 1922)
conduct is has actual 4. The appointment of a new agent for the same
such that the authority to business or transaction revokes the previous
agent act on behalf agency from the day on which notice was given
reasonably of the principal to the former agent. (CIVIL CODE, Art. 1923)
believed that 5. Agency is revoked if principal directly manages
the principal the business entrusted to the agent, dealing
intended him directly with third persons (CIVIL CODE, Art.
to act as an 1924)
agent 6. When two or more principals have granted a
power of attorney for a common transaction,
NOTE: An authority embodied in a letter is sufficient. any one of them may revoke the same without
(Jimenez v. Rabot, G.R. No. 12579) the consent of the others. (CIVIL CODE, Art.
1925)
Instances creating an Agency by Operation of 7. A general power of attorney is revoked by a
Law special one granted to another agent, as
1. The agent must finish the business already regards the special matter involved in the latter.
begun on the death of the principal, should (CIVIL CODE, Art. 1926)
delay entail any danger (CIVIL CODE, Art. 1884, 8. The power shall continue to be in full force until
par. 2) the notice is rescinded in the same manner as
2. In case a person declines an agency, he is it was constituted. (CIVIL CODE, Art. 1873).
bound to observe the diligence of a good father However, constitution by Special Information
of a family in the custody and preservation of may be revoked by notice in a daily newspaper,
the goods forwarded to him by the owner until provided it can be proven that 3rd persons in
the latter should appoint an agent (CIVIL CODE, question read the revocation (Lustan v. Court of
Art. 1885) Appeals, G.R. No. 111924)
3. The agent, even if he should withdraw from the
agency for a valid reason, must continue to act
until the principal has had reasonable
opportunity to take the necessary steps to meet
the situation (CIVIL CODE, Art. 1929).
4. Anything done by the agent, without knowledge
of the death of the principal or of any other
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C. OBLIGATIONS OF THE AGENT 9. Not to borrow money for himself even if he has
been authorized to Loan money on behalf of the
1. GENERAL OBLIGATIONS principal.
NOTE: The agent can loan money to the
General Obligations of the Agent to the principal at the current rate of interest if he has
Principal (GOC) been authorized to borrow money for the
1. Act with utmost Good faith & loyalty for the principal. (CIVIL CODE, Art. 1890)
furtherance of principal’s interests 10. Render an Account of his transactions and
2. Obey principal’s instructions deliver to the principal whatever he may have
3. Exercise reasonable Care received by virtue of the agency (If the agent
fails to deliver and instead converts or
General Obligation of Agent who accepts the appropriates for his own use the money or
Agency property belonging to his principal, he may be
NOTE: The agent is bound by his acceptance to charged with ESTAFA.) (CIVIL CODE, Art. 1891)
carry out the agency and is liable for the damages 11. Be Responsible in certain cases for the act of
which, through his non-performance, the principal the substitute appointed by him (CIVIL CODE,
may suffer. Art. 1892)
12. Pay Interest on funds he has applied to his own
He must also finish the business already begun on use (CIVIL CODE, Art. 1896)
the death of the principal, should delay entail any
danger. (CIVIL CODE, Art. 1884) Obligation of Agent who declines Agency
In case a person declines an agency, he is bound to
Specific Obligations of the Agent (FADI – observe the diligence of a good father of a family in
CALAMARI) the custody and preservation of the goods
1. Carry out the agency (CIVIL CODE, Art. 1884); forwarded to him by the owner until the latter should
2. Answer for damages which through his non- appoint an agent. The owner shall as soon as
performance the principal may suffer; practicable either appoint an agent or take charge of
3. Finish the business already begun on the death the goods. (CIVIL CODE, Art. 1885)
of the principal should delay entail any danger
(exception to the rule that death extinguishes 2. EFFECTS OF AGENT’S ACTS TO
agency) (CIVIL CODE, Art. 1884); PRINCIPAL’S LIABILITY
4. Observe the Diligence of a good father of a
family in the custody and preservation of the Effects of Agent’s Acts to Principal’s Liability
goods forwarded to him by the owner in case he LIABILITY OF
ACT OF AGENT
declines an agency, until an agent is appointed PRINCIPAL
(CIVIL CODE, Art. 1885); Mismanagement of Principal still
5. Advance necessary funds if there be a the business by the responsible for the
stipulation to do so (except when the principal agent acts contracted by the
is insolvent) (CIVIL CODE, Art. 1886); agent with respect to
6. Act in accordance with the Instructions of the 3rd persons; Principal,
principal, and in default thereof, to do all that a however, may seek
good father of a family would do (CIVIL CODE, recourse against the
Art. 1887); agent
Exceptions (to the rule that the agent must not Tort committed by the Principal civilly liable
depart from the instructions of principal) (SAI): agent so long as the tort is
i. There’s a Sudden emergency committed by the
ii. If the instructions are Ambiguous agent while
iii. If the Departure is so Insubstantial that it performing his duties
does not affect the result and the principal in furtherance of the
suffers no damage thereby (De Leon, principal’s business
2010) Agent in good faith but Principal is liable for
7. Not to carry out the agency if it would Manifestly prejudices 3rdparties damages
result in loss or damage to the principal (CIVIL
CODE, Art. 1888); Agent in bad faith and Only the agent is liable
8. Answer for damages if there being a conflict prejudices 3rd persons for damages
between his & his principal’s interests, he
prefers his own (CIVIL CODE, Art. 1889);
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When Agent has a right to disobey the Q: A constituted B as his agent. Can B appoint
Principal’s instructions a substitute?
1. When the instruction calls for the performance A: Yes. The agent may appoint a substitute or sub-
of illegal acts agent if the principal has not prohibited him from
2. Where he is privileged to do so to protect his doing so, but he shall be responsible for the acts of
security in the subject matter of the agency the substitute:
a. When he was not given the power to
When obligation to account not applicable appoint one;
1. If the agent acted only as a middleman with the b. When he was given such power, but
task of merely bringing together the vendor and without designating the person, and the
the vendees. person appointed was notoriously
2. If the agent had informed the principal of the incompetent or insolvent. (CIVIL CODE, Art.
gift/bonus/profit he received from the purchaser 1892)
and his principal did not object.
3. Where a right of lien exists in favor of the agent. If there is a prohibition, B cannot do so, unless he
(De Leon, 2019) seeks the consent of the principal.
When Agent may incur Personal Liability 4. RESPONSIBILITY OF TWO (2) OR

1. When the agent expressly binds himself (CIVIL MORE AGENTS APPOINTED
CODE, Art. 1897) SIMULTANEOUSLY
2. When the agent exceeds his authority (CIVIL
CODE, Art. 1897, 1898)
General rule: Joint liability
3. When an agent by his act prevents performance
Exception: When solidarity has been expressly
on the part of the principal
stipulated, in which case, each of the agents
4. When a person acts as an agent without
becomes solidarily liable for (1) the non-fulfillment of
authority or without a principal
the agency; and for (2) the fault or negligence of his
5. A person who purports to act as agent of an
fellow agent(s) (CIVIL CODE, Arts.1894 & 1895)
incapacitated principal
Exception to the Exception: when one of the other
3. APPOINTMENT OF SUB-AGENT agent/s acts beyond the scope of his authority –
innocent agent is not liable. (CIVIL CODE, Art. 1895)
Appointment of Sub-Agent
1. If the principal has not prohibited the agent from Doctrine of Agency by Necessity
appointing a substitute, the Principal will be An agency can never be created by necessity; what
liable to 3rd persons for the acts of the sub- is actually created is additional authority in an agent
agent within the scope of his authority appointed and authorized before the emergency
2. If there is a prohibition but nevertheless the arose.
agent appoints a sub-agent, all the sub-agent’s
acts are void as to the principal and the agent The existence of emergency or other unusual
will be personally liable as to third parties. conditions may operate to invest in an agent
3. If there is authority to appoint and sub-agent is authority to meet the emergency, provided (PURE):
not designated by the principal, the agent will be 1. The agent’s enlarged authority is exercised for
liable for all the acts of the sub-agent if the sub- the principal’s Protection
agent is notoriously incompetent or insolvent. 2. The agent is Unable to communicate with
4. If there is authority to appoint and sub-agent is principal;
designated by the principal, the agent is 3. The means adopted are Reasonable under the
released from any liability from the acts of the circumstances; and
sub-agent and the principal shall be liable. 4. The emergency really Exists.
5. If the appointment of a sub-agent is not
prohibited, it shall be valid if it is beneficial to the Effect where 3rd Person aware of limits of
principal. But, should the principal incur agent’s power
damage due to such appointment, the agent If the agent exceeds his authority, it shall not bind
shall be primarily responsible for the acts of the the principal unless the principal ratifies it.
sub-agent. (De Leon, 2019) (Cervantes v. CA, G.R. No. 125138)
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When third persons can repudiate the contract transaction, and to his principal for acting
Before actual ratification by the principal, or before without authority; may recover compensation
the principal has signified his willingness to ratify the 2. With respect to principal - assumes
agent’s acts. (CIVIL CODE, Arts. 1317 & 1901) responsibility for the unauthorized act, as if the
agent had acted under original authority but not
Effect of the principal receiving the benefits of liable for acts outside the authority approved by
the transaction his ratification
He is deemed to have ratified it. A principal may not 3. With respect to 3rd persons - bound by
accept the benefits of a transaction and at the same ratification to the same extent as if the ratified
time repudiate its burdens. act had been authorized; cannot raise the
question of the agent’s authority to do the
Conditions for Ratification ratified act
1. The principal must have capacity and power to
ratify NOTE: There is ratification when the principal sues
2. He must have had knowledge of material facts to enforce the contract entered into by the
3. He must ratify the acts in its entirety unauthorized agent. However, there is no such
4. The act must be capable of ratification ratification if the principal’s action is brought to avert
5. The act must be done on behalf of the principal a greater loss rather than to assert a gain.
6. To be effective, ratification need not be (Robinson Machine Works v. Borse)
communicated or made known to the agent or
the third party. The act or conduct of the NOTE: The agent is responsible not only for fraud,
principal rather than his communication is the but also for negligence, which shall be judged with
key. But before ratification, the third party is free more or less rigor by the courts, according to
to revoke the unauthorized contract. whether the agency was or was not for
compensation. (CIVIL CODE, Art. 1909)
Effects of Ratification
1. With respect to agent - relieves the agent from
liability to the third party for the unauthorized
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ACTS OF THE
EFFECT EXCEPTION(S)
AGENT
On behalf of the Binds the principal Agent liable if he:
principal, within the Agent not personally liable (CIVIL i. Expressly makes himself liable
scope of authority CODE, Art. 1881)
Without or beyond Contract is unenforceable as Binding on the principal when:
scope of authority against the principal but binds the i. Ratified or
agent to the third person (CIVIL ii. The principal allowed the agent to
CODE, Arts. 1317, 1403 and 1898) act as though he had full powers
Within the scope of Not binding on the principal. When the transaction involves things
authority but in the Principal has no cause of action belonging to the principal:
agent’s name against the 3rd parties and vice versa • Remedy of the principal - damages for
agent’s failure to comply with the
agency.
• Remedies of the third person in case of
non-performance:
i. If the case falls under the general
rule, he can sue the agent.
ii. But when the contract involves
things belonging to the principal, he
can sue the principal.
iii. But if it cannot be determined
without litigation who is liable, he
can sue both.
Within the scope of the Insofar as 3rd persons are
written power of concerned, not required to inquire
attorney but agent has further than the terms of the written
actually exceeded his power, agent acted within scope of
authority according to his authority;
an understanding Principal is estopped
between him & the
principal
With improper motives Motive is immaterial; as long as Third person knew agent was acting for his
within the scope of authority, valid own benefit: principal is not liable to 3rd
person
Authorized - principal still liable
Beyond the scope of the agent’s

authority
General Rule: Principal not liable
Exception: principal takes
advantage of a contract or receives
benefits made under false
representation of his agent
For the agent’s own benefit –

principal still liable; agent’s motive
immaterial
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5. OBLIGATION RULES FOR upon with the purchaser. The agent shall be
COMMISSION AGENTS liable for damages if he does not collect the
credits of his principal at the time when they
Commission Agent - one whose business is to become due and demandable, unless he
receive and sell goods for a commission and who is proves, that he exercised due diligence for that
entrusted by the principal with the possession of purpose. (CIVIL CODE, Art. 1907)
goods to be sold, and usually selling in his own
name.
D. OBLIGATIONS OF THE PRINCIPAL
Distinction between Commission Agent and
Broker 1. OBLIGATIONS OF THE PRINCIPAL
COMMISSION TO THE AGENT
BROKER
AGENT
Engaged in the No custody or Obligations of the Principal to the Agent
purchase and sale for possession of the (CARIP)
a principal of personal thing he disposes; 1. Comply with all the obligations agent contracted
property which has to merely a go-between, in representation of the principal (CIVIL CODE,
be placed in his an intermediary Art. 1910)
possession and between the seller and 2. Advance sums necessary for the execution of
disposal the buyer the agency, when agent so requests; liable for
Has a relation with Maintains no relation reimbursement regardless of the undertaking’s
principal, buyer or with the thing which he success whenever agent had advanced & has
seller, and property purchases or sells no fault; includes interest (CIVIL CODE, Art.
which is the object of 1912)
the transaction 3. Reimburse the agent for all advances made by
him provided the agent is free from fault (CIVIL
Distinction between Ordinary Agent and CODE, Art. 1912)
Commission Agent 4. Indemnify the agent for all the damages which
COMMISSION the execution of the agency may have caused
ORDINARY AGENT the latter without fault or negligence on his part
AGENT
Acts for and in behalf May act in his own (CIVIL CODE, Art. 1913)
of his principal name or in that of the 5. Pay the agent the compensation agreed upon
principal or the reasonable value of the latter’s services
Need not have Must be in possession (CIVIL CODE, Art. 1875)
possession of the of the thing he
principal’s goods disposes Liability of 3rd Persons to the Principal
1. In Contract – a 3rd person is liable to the
Obligations of a Commission Agent (RMCB) principal upon contracts entered into by his
1. Responsible for the goods received by him, as agent, as if the contract has been entered into
described in the consignment, unless upon by the principal. (CIVIL CODE, Art. 1897)
receiving them he should make a written 2. In Tort – the 3rd person’s tort liability to the
statement of the damage and deterioration principal, insofar as the agent is involved in the
suffered by the same (CIVIL CODE, Art. 1903) tort, arises in 3 situations:
2. If goods are of the same kind and mark but i. Where the 3rd person damages or injures
belonging to different owners, make a property or interest of the principal in the
distinction by counter Marks and designate the possession of the agent
merchandise respectively belonging to each ii. Where the 3rd person colludes with the
principal (CIVIL CODE, Art. 1904) agent to injure/defraud the principal
3. He cannot, without consent of the principal, sell iii. Where the 3rd person induces the agent to
on Credit; should he do, principal may demand violate his contract with the principal to
payment in cash, but the commission agent betray the trust reposed upon him by the
entitled to any interest/benefit which may result principal.
from such sale (CIVIL CODE, Art.1905)
4. If an agent receives guarantee commission (a
del credere agent), he shall Bear the risk of
collection and shall pay the principal the
proceeds of the sale on the same terms agreed
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2. RULES ON LIABILITY OF TWO (2)

OR MORE PRINCIPALS 3. PRINCIPAL’S LIABILITIES FOR
EXPENSES
Requisites for Solidary Liability of Principals
1. There are two (2) or more principals General rule: Principal is liable for the expenses
2. The principals have all concurred in the incurred by the agent.
appointment of the same agent
3. The agent is appointed for a common Exceptions (AFUS):
transaction or undertaking (CIVIL CODE, Art. 1. If the agent Acted in contravention of the
1915) principal's instructions, unless the latter should
wish to avail himself of the benefits derived from
NOTE: The rule in Art. 1915 applies even when the the contract.
appointments were made by the principals in 2. When the expenses were due to the Fault of the
separate acts, provided that they are for the same agent.
transaction. The solidarity arises from the 3. When the agent incurred them with knowledge
common interest of the principals and not from that an Unfavorable result would ensue, if the
the act of constituting the agency. principal was not aware thereof.
4. When it was Stipulated that the expenses would
The principal is not bound by the acts of the be borne by the agent, or that the latter would
authorized agent where the latter failed to indicate be allowed only a certain sum. (CIVIL CODE,
in the mortgage that she was acting for and in behalf Art.1918)
of her principal, and the REM explicitly shows on its
face that it was signed by agent in her own name 4. AGENCY BY ESTOPPEL
and personal capacity. The third-party bank has no
one to blame but itself. Not only did it act with undue Who can be estopped to deny Agency?
haste when it granted and released the loan, but it 1. Estoppel of Agent - one professing to act as
also acted negligently in preparing the REM as it agent is estopped to deny his agency both as
failed to indicate that the agent was signing it for and against his asserted principal and the third
on behalf of the principal. (Bucton v. Rural Bank of persons interested in the transaction in which
El Salvador, Inc., G.R. No. 179625) he is engaged
Rule where two persons contract separately 2. Estoppel by the Principal
with Agent and Principal i. As to agent – one knowing another is acting
Two persons may contract separately with the agent as his agent and fails to repudiate his acts,
and the principal with regard to the same thing. If the or accept the benefits of them, will be
two contracts are incompatible with each other, the estopped to deny the agency as against
one of prior date shall be preferred. This is such other
subject, however, to the rules on Double Sales ii. As to third persons – one who knows that
under Art. 1544 of the Civil Code (i.e., for movables: another is acting as his agent or permitted
first in possession, first in right; for immovables: first another to appear as his agent, to the injury
to register in good faith, first in right; absent any of third persons who have dealt with the
inscription: first in possession or party who presents apparent agent as such in good faith and in
oldest title acquires ownership). (CIVIL CODE, Art. the exercise of reasonable prudence, is
1916) estopped to deny the agency (Litonjua, Jr.
v. Eternit Corp., G.R. No. 144805)
Agent’s Right of Retention
1. Specific (only for those goods connected with 3. Estoppel of Third Persons – a third person,
the agency); and having dealt with one as an agent may be
2. Until the principal effects the reimbursement estopped to deny the agency as against the
and pays the indemnity (CIVIL CODE, Art. 1914) principal, agent or 3rd persons in interest.
NOTE: The right of retention is limited to two 4. Estoppel of the Government - government
instances: (a) reimbursement of sums neither estopped by the mistake/error of its
advanced by the agent; and (b) indemnification agents; may be estopped through affirmative
of damages for all damages arising from the acts of its officers acting within the scope of their
execution of the agency without fault or authority. (Heirs of Atty. Jose Reyes v.
negligence. (CIVIL CODE, Arts. 1912, 1913, and Philippines, G.R. No. 150862)
1914)
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Distinction between Ratification and Estoppel

RATIFICATION ESTOPPEL Implied Revocation of Agency
Rests on intention Rests on prejudice 1. Principal appoints a new agent for the same
business or transaction (only if there is
incompatibility); effective as between the
Affects the entire Affects only relevant principal and the agent only if communicated to
transaction from the parts of the the agent; does not prejudice rights of third
beginning transaction persons acting in good faith without knowledge
Substance of Substance of estoppel of the revocation (CIVIL CODE, Art. 1923)
ratification is is the principal’s 2. Principal directly manages the business
confirmation of an inducement to another entrusted to the agent, or deals directly with 3rd
authorized act or to act to his prejudice persons (CIVIL CODE, Art. 1924)
conduct after it has
been done Effect of Issuance of a Special Power of Attorney
The general power is impliedly revoked as to
Distinction between Apparent Authority and matters covered by the special power because a
Authority by Estoppel special power naturally prevails over a general
APPARENT AUTHORITY BY power (CIVIL CODE, Art. 1926)
AUTHORITY ESTOPPEL
Though not actually Where the principal, 6. PRINCIPAL’S LIABILITY FOR
granted, principal by his negligence, DAMAGES DESPITE REVOCATION
knowingly permits his agent to
permits/holds out the exercise powers not Principal’s Liability for Damages despite
agent as possessing granted to him, even Revocation
the necessary powers though the principal 1. If the agency was constituted for a fixed period,
to act in a certain way may have no notice or the principal shall be liable for damages
knowledge of the occasioned by the wrongful discharge of the
conduct of the agent agent before the expiration of the period fixed
2. Even if there was no time fixed for the
A principal may be held liable under the Doctrine of continuance of the agency, but the agent can
Apparent Authority when the principal’s liability prove that the principal acted in bad faith by
arises from: (a) his manifestations of the existence revoking the agency in order to avoid the
of the agency which need not be expressed, but payment of commission about to be earned, the
may be general and implied, or acts of the agent principal can be held liable for damages
which suggest the existence of a principal-agency (Villanueva supra at 209-210 (citing Diolosa v.
relationship which are known to the principal and CA, 130 SCRA 350 & Valenzuela v. CA, 191
which the principal does not deny; and (b) the SCRA 1)).
reliance of third persons upon the conduct of the
principal or agent. (Professional Services, Inc. v. Necessity of Notice of Revocation
CA, G.R. No. 126297) 1. As to the agent – notice is always necessary;
sufficient notice if the party to be notified
5. PRINCIPAL'S REVOCATION OF THE actually knows, or has reason to know, a fact
AGENCY indicating that his authority has been terminated
or suspended; revocation without notice to the
General Rule: The principal may revoke the agency agent will not render invalid an act done in
at will, and compel the agent to return the document pursuance of the authority
evidencing the agency. Such revocation may be 2. As to 3rd persons – notice necessary
express or implied. (CIVIL CODE, Art. 1920) 3. As to former customers - notice must be given
to them because they always assume the
Exception: Agency coupled with interest continuance of the agency relationship
1. When a bilateral contract depends upon the 4. As to other persons - notice by publication is
agency. enough (CIVIL CODE, Art. 1922)
2. When the agency is the means of fulfilling an
obligation already contracted Effect of Extinguishment without Notice
3. When a partner is appointed as manager of a Act of agent deemed valid insofar as third parties
partnership in the contract of partnership and acting in good faith and without knowledge of
his removal from the management is revocation. (CIVIL CODE, Art. 1922; Bitte v. Jones,
unjustifiable. (CIVIL CODE, Art. 1927) G.R. No. 212256)
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reinstatement. The agent can only demand

E. MODES OF EXTINGUISHMENT damages. (Orient Air Services v. Court of Appeals,
G.R. No. 76931)
1. HOW AGENCY IS EXTINGUISHED
What happens if the subject matter of the
agency is lost or destroyed?
How Agency is Extinguished (EDWARD)
General rule: In the absence of any agreement by
1. By the Expiration of the period for which the
the parties to the contrary, the loss or destruction of
agency was constituted.
the subject matter of the agency terminates the
2. By the Death, civil interdiction, insanity or
agent‘s authority to deal with reference to it.
insolvency of the principal or of the agent;
3. By the Withdrawal of the agent;
Exceptions:
4. By the Accomplishment of the object or purpose
1. If it is possible to substitute other material for
of the agency;
that which was destroyed without substantial
5. By its Revocation;
detriment to either party
6. By the Dissolution of the firm or corporation
2. If the destroyed subject matter was not in fact
which entrusted or accepted the agency (CIVIL
essential to the contract
CODE, Art. 1919)
3. A partial loss or destruction (agency may
continue in existence as to other property not
2. OTHER MODES affected). (De Leon, 2019)
Other Modes If the loss is due to a breach or wrongful act of the

1. Mutual withdrawal from the relationship by the principal, he liable for damages.
principal and agent;
2. By the happening of a supervening event that Form of Renunciation
makes illegal or impossible the objective or It is not always necessary for the agent to renounce
purpose for which the agency was constituted, the agency expressly. He can do so impliedly, such
like the destruction of the subject matter which as:
is the object of the agency. 1. Where he has conducted himself in a manner
incompatible with his duties as agent
NOTE: The list is not exclusive; causes are 2. When he abandons the object of his agency and
particular only to agency; may be extinguished by acts for himself in committing a fraud upon his
the modes of extinguishment of obligations in principals
general whenever they are applicable, like loss of 3. When he files a complaint against the principal
the thing and novation. and adopts an antagonistic attitude towards him
(De Leon, 2019)
Presumption of Continuance of Agency
When once shown to have existed, an agency 3. EXCEPTIONS TO
relation will be presumed to have continued, in the EXTINGUISHMENT BY DEATH
absence of anything to show its termination.
Exceptions to Extinguishment by Death (KID-C)
Continuance of Agency
Parties must be: 1. If the act of the agent was executed without the
1. Present; Knowledge of the death of the principal and the
2. Capacitated; and third person who contracted with the agent
3. Solvent. acted in good faith. (Rallos v. Go Chan, G.R.
No. L-24332)
Modes of Extinguishing an Agency, Generally 2. To avoid Damage upon the agent’s death (CIVIL
(ASO) CODE, Art. 1932)
1. Agreement 3. The act of the agent was executed without
2. Subsequent acts of the parties which may be knowledge of the death of the principal and the
either: third person who contracted with the agent
i. By the act of both parties or by mutual acted in good faith (CIVIL CODE, Art. 1931)
consent
ii. By the unilateral act of one of them 4. If it has been constituted in the Common
3. By Operation of Law interest of the principal and of the agent, or in
the interest of a third person who has accepted
NOTE: Even if the reason for extinguishing the
agency is not true, the agent cannot insist on
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the stipulation in his favor (CIVIL CODE, Art.

1930)
Can the heirs continue the agency?

General rule: Agency calls for personal services on
the part of the agent; rights & obligations are not
transmissible
Exceptions:
1. Agency by operation of law, or a presumed or
tacit agency
2. Agency is coupled with an interest in the subject
matter of the agency (e.g. power of sale in a
mortgage). (De Leon, 2019)
Revocation
Termination of the agency by the subsequent act of
the principal
Renunciation/Withdrawal
Termination of the agency by the subsequent act of
the agent
May the agent withdraw from the agency at

will?
Agent may do so but subject to the contractual
obligations owing to the principal (i.e., fixed period
of time for the agency or purpose not yet
accomplished).
NOTE: The mere fact that the agent violates the

principal’s instructions does not amount to
renunciation, but that may render him liable for
damages.
-- end of topic --
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IX. CREDIT TRANSACTIONS

A. LOAN
1. IN GENERAL
PART I: CREDIT TRANSACTIONS
Credit Transactions include all transactions
involving the purchase or loan of goods, services or
A. LOAN
money in the present with a promise to pay or deliver
1. In General
in the future (contract of security).
2. Commodatum
3. Simple Loan
2 Types of Credit Transactions
4. Interests Loan
Secured transactions – those supported by a
B. DEPOSIT
collateral or an encumbrance of property.
C. GUARANTY AND SURETYSHIP
Unsecured transactions – those supported only by
D. QUASI-CONTRACTS
a promise to pay or the personal commitment of
1. Negotiorium Gestio
another such as a guarantor or surety.
2. Solutio Indebti
Security is something given, deposited or serving
as a means to ensure the fulfillment or enforcement
of an obligation or of protecting some interest in the
property.
2 Types of Security
Personal – when an individual becomes a surety or
a guarantor
Real or Property – when an encumbrance is made
on property (e.g. real estate mortgage, chattel
mortgage over vessels or aircrafts or security
interest over movables)
Characteristics of Loans
1. Real Contract – delivery is essential for
perfection of the loan (BUT a promise to lend,
being consensual, is binding upon the parties)
2. Unilateral Contract - only the borrower has
the obligation once the subject matter has
been delivered
Art. 1933 (06, 04, BAR): If the bailor delivers to the

bailee a non-consumable thing so that bailee may
use the same for a certain time and return the
identical thing, the contract perfected is a contract
of commodatum. There is NO TRANSFER OF
OWNERSHIP.
In mutuum, the object borrowed must be a

consumable thing the OWNERSHIP OF WHICH IS
TRANSFERRED to the borrower who incurs the
obligation to return the same consumable to the
lender in an equal amount, and of the same kind and
quality.
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of the term in case of

COMMODATUM MUTUUM urgent need (Art.
1946), or when the
As to object contract is precarium,
in which case, the
Ordinarily involves The subject matter is bailor may demand
something not money or other the return of the thing
consumable except consumable thing. at will. (Art. 1947)
when the purpose of
consumable goods is
merely for exhibition. 2. COMMODATUM
(Art. 1936)
As to cause Bailment - is the delivery of property of one person

to another in trust for a specific purpose, with a
Essentially gratuitous. May be gratuitous or contract, express or implied, that the trust shall be
(Art. 1933) Otherwise, onerous (with a faithfully executed and the property returned or duly
it ceases to be stipulation to pay accounted for when a special purpose is
commodatum. interest). accomplished or kept until the bailor reclaims it.
Generally, it is contractual, but may also be created
As to purpose by operation of law.
Use or temporary Consumption Parties in Bailment

possession. Bailor– The lender/giver; the party who delivers
possession/custody of the thing bailed
As to subject matter Bailee – The recipient; the party who receives the
possession/custody of the thing delivered
Real or personal Personal property
property Commodatum – bailor delivers to bailee a non-
consumable thing so that the latter may use it for
As to ownership of the thing a certain time and return the identical thing
Exception to the object: may be a consumable
thing if the purpose is merely exhibition.
Retained by the bailor Passes to the debtor
COMMODATUM USUFRUCT
As to return of the thing The bailee only The usufructuary gets
acquires the use of the the right to the use and
thing loaned but not its to the fruits of the
Same thing loaned Pay the same amount of fruits. (Art. 1935) usufruct. (Art. 564)
the same kind and It creates only a purely It creates a real right
quality personal right to use to the fruits of another’s
another’s property, and property. (Art. 564)
As to risk of loss
requires a stipulation to
enable the bailee to
Bailor since he is the Debtor/Bailee (even if “make use” of the fruits.
owner the thing is lost through (Arts. 1939-1940)
a fortuitous event) Real contract; Consensual contract
perfected only by
As to time of return delivery of the subject
matter thereof. (Art.
Upon the lapse of the Upon the lapse of the 1934)
term agreed upon. term agreed upon.
Elements of commodatum
However, Bailor may Exception: Art. 1198 1. Delivery of non-consumable thing;
demand the return of when the debtor loses 2. Obligation to return it (Art. 1933).
the thing loaned every right to make use
before the expiration of the period
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Kinds of commodatum Art. 1951 (05, BAR):

(a) Ordinary commodatum – bailee uses the General Rule: Bailee has no right of retention on
thing for a certain period of time the ground that the bailor owes him something.
(b) Precarium – bailor may demand the thing Exception: Art. 1951 on hidden defects (Bailor who
loaned at will; exists in cases where: knows flaws but does not advise bailee is liable to
i. There is no stipulation as to the bailee for damages suffered because of flaws).
duration of the contract or use of the
thing loaned What are the obligations of a bailor in
ii. Use of the thing is merely tolerated by commodatum?
the owner(Art. 1947). 1. Respect the duration of the loan. Bailor
cannot demand return until after (a)
Principal Obligations of a Bailee in a expiration of period stipulated, or (b)
Commodatum accomplishment of use for which
1. Take good care of the thing with the commodatum was constituted. (Art. 1946)
diligence of a good father of a family. (Art. a. Exceptions:
1163) i. If urgently need thing (may demand
2. Use the thing loaned only for the purpose return/temporary use); or
for which it was loaned and for no other ii. If the bailor may demand immediate
purpose. (Art. 1935) return of the thing if the bailee
3. Payment of the ordinary expenses for the commits any acts of ingratitude. (Art.
use and preservation of the thing loaned. 1948)
(Art. 1941) 1. If the bailee should commit
4. Payment of a 50% portion (unless some offense against the
otherwise stipulated) of extraordinary person, the honor or the
expenses arising from the actual use of the property of the bailor, or of his
thing, which shall be borne by both the wife or children under his
bailor and the bailee, even though the parental authority;
bailee acted without fault, unless there is a 2. If the bailee imputes to the
stipulation to the contrary. (Art. 1949, par. bailor any criminal offense, or
2) any act involving moral
5. Return and to not retain the thing loaned turpitude, even though he
except for damages mentioned in Art. should prove it, unless the
1951. crime or the act has been
committed against the bailee
When is the bailee in a commodatum liable for himself, his wife or children
the loss of the thing which is the object of the under his authority;
contract, even if such loss is due to a fortuitous 3. If he unduly refuses him
event? support when the bailee is
1. If he devotes the thing to any purpose legally or morally bound to give
different from that for which it has been support to the bailor.
loaned. 2. Refund to the bailee extraordinary
2. If he keeps it longer than the period expenses incurred for the preservation of
stipulated, or after the accomplishment of the thing, provided the bailee brings the
the use which the commodatum has been same to the knowledge of the bailor before
constituted. incurring them, except when the reply to the
3. If the thing loaned has been delivered with notification cannot be awaited without
the appraisal of its value, unless there is a danger. (Art. 1949, par. 1) However, if the
stipulation exempting the bailee from extraordinary expenses arise on the
responsibility in case of a fortuitous event. occasion of the actual use by the bailee,
4. If he lends or leases the thing to a third even though he acted without fault, they
person, who is not a member of his shall be borne equally by both the bailor
household. and the bailee, unless there is a stipulation
5. If, being able to save either the thing to a to the contrary. (Art. 1949, par. 2)
third person or his own thing, he chose to 3. Be liable for damages which the bailee may
save the latter. (Art. 1942) suffer for failure of the bailor to advise the
former of flaws (hidden defects) of the thing
loaned which are known to him. (Art. 1951)
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3. SIMPLE LOAN 4. INTERESTS ON LOAN
Mutuum or Simple Loan - lender delivers to the The two types of interest are the following:
borrower money or other consumable thing upon the 1. Monetary or conventional interest –
condition that the latter will pay the same amount of refers to the compensation set by the
the same kind and quality(Art. 1953) parties for the use or forbearance of money;
and
Obligations of a borrower in a simple loan or 2. Compensatory interest – interest that
mutuum may be imposed by law or by courts as
1. Pay the creditor an equal amount of the penalty for damages. (Hun Hyung Park v.
same kind and quality. (Art. 1953) Eung Won Choi, G.R. No. 220826, March
2. Pay interest, if stipulated in writing. (Art. 27, 2019)
1956)
Note: Compensatory/penalty/indemnity interest
Obligation of the Borrower to Pay refers to damages paid arising from delay in paying
1. What? a fixed sum of money or delay in assessing and
a. Money paying damages. (Sps. Abella v. Sps. Abella, G.R.
i. General Rule: Same amount No. 195165, July 08, 2015)
ii. Exception: may change under
certain circumstances, such as Q: Company A contracted Company B to apply
when there is an extraordinary a granite wash-out finish on the exterior walls of
inflation or deflation of the one of its buildings. However, the finish began
currency stipulated. peeling off and falling from the walls. Company
b. Fungible thing other than money: A got Company B to do minor repairs. Company
another thing of the same kind, quantity A also got Company C to redo the entire finish
and quality. In case it is impossible, its after Company B manifested that it was not in a
value at the time of perfection of the position to do new finishing work. Although,
loan. Company B expressed that it was willing to
2. When? share part of the cost.
a. If one is provided, the period agreed
upon. The Construction Industry Arbitration
b. If none is provided, payable Commission (CIAC) decided that Company B
immediately; if the parties intended a was entitled to recover from Company A
period but the same was not specified, representing the cost of repairs done by another
the court may fix the period. (Art. 1197) contractor. Company A assailed the portion on
c. Payable immediately when the debtor its liability for construction defects. The SC held
loses the right to make use of the period that Company A was not liable for the amount
under Article 1198 claimed by Company B.
i. When after the obligation has been Company B moved for reconsideration arguing
contracted, he becomes insolvent, that its liability for interest should commence on
unless he gives a guaranty or the date on which the SC’s decision that granted
security for the debt; Company A’s appeal became final and not on
ii. When he does not furnish to the when the CIAC decision was issued.
creditor the guaranties or
securities which he has promised; What interest is involved, monetary or
iii. When by his own acts he has compensatory?
impaired said guaranties or
securities after their establishment, A: The interest is compensatory.
and when through a fortuitous
Monetary interest under Article 1956 of the Civil
event they disappear, unless he
Code serves as compensation fixed by the parties
immediately gives new ones
for the use or forbearance of money. As can be
equally satisfactory;
gleaned from the foregoing provision, payment of
iv. When the debtor violates any
monetary interest is allowed only if: (i) there was an
undertaking, in consideration of
express stipulation for the payment of interest; and
which the creditor agreed to the
(ii) the agreement for the payment of interest was
period;
reduced in writing. The concurrence of the two
v. When the debtor attempts to
conditions is required for the payment of monetary
abscond.
interest.
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Compensatory interest (i.e., interest awarded as What is the legal interest rate?
damages under Articles 2209 to 2213 of the Civil Beginning July 1, 2013, the rate of interest on the
Code) is that which is "allowed in actions for breach loan or forbearance on money, goods, or credits and
of contract or tort for the unlawful detention of the rate allowed in judgments, in the absence of
money already due." As the governing provisions stipulation, shall be 6% per annum (BSP Circular
indicate, compensatory interest may be imposed by No. 799).
law or by the courts as penalty or indemnity for
damages. However, judgments that became final and
executory before July 1, 2013 shall continue to
In the present case, the principal award represents apply the previous legal rate of 12% per annum
the material cost adjustment incurred by Company (NACAR v. Gallery Frames Inc., G.R. No. 189871,
A which Company B failed to pay. The award 2013).
proceeds from Company B's breach of its
construction contract with Company A — a contract NOTE: The computation of the amount due must
which does not constitute a loan or forbearance of take into consideration the legal rate or rates (6%
money. Accordingly, the interest disputed herein and/or 12% per annum) applicable throughout the
constitutes compensatory interest awarded duration of the period in which interest runs. (DPWH
pursuant to Article 2210 of the Civil Code. Secretary vs. Spouses Tecson, G.R. No. 179334,
(Philippine Commercial and International Bank v. 2015)
William Golangco Construction Corp. G.R. No.
195372, April 10, 2019) What are the rules in the computation of legal
interest? (Lara’s Gifts & Decors v. Midtown
When will interest due and unpaid earn interest? Industrial Sales, G.R. No. 225433, 2019)
Generally, interest due and unpaid shall not earn 1. When the obligation is breached, and it
interest, except: consists in the payment of a sum of
1. Interest due shall earn legal interest at the money, i.e., a loan or forbearance of
rate of 6% per annum from the time it is money, goods, credits or judgments, the
judicially demanded until fully paid, interest due shall be that which is
although the obligation may be silent upon stipulated by the parties in writing,
this point. (Art. 2212) provided it is not excessive and
2. If there is agreement to this effect. (Art. unconscionable, which, in the absence of a
1959) stipulated reckoning date, shall be
computed from default, i.e., from
Note: Interest on interest refers to interest due on extrajudicial or judicial demand in
conventional interest. (Sps. Abella v. Sps. Abella, accordance with Article 1169 of the Civil
G.R. No. 195165, July 08, 2015) Code, UNTIL FULL PAYMENT, without
compounding any interest unless
When will the debtor be liable for interest even compounded interest is expressly
in the absence of stipulation to pay interest? stipulated by the parties, by law or
Generally, no interest shall be due unless it has regulation.
been expressly stipulated in writing. (Art. 1956) a. Interest due on the principal
amount accruing as of judicial
In the following instances, interest is due even if not demand shall SEPARATELY
expressly stipulated: earn legal interest at the
1. If the obligation consists in the payment of prevailing rate prescribed by the
a sum of money, and the debtor incurs in Bangko Sentral ng Pilipinas,
delay, the indemnity for damages, there from the time of judicial demand
being no stipulation to the contrary, shall be UNTIL FULL PAYMENT.
the payment of the interest agreed upon, 2. In the absence of stipulated interest, in a
and in the absence of stipulation, the legal loan or forbearance of money, goods,
interest, which is six per cent per annum credits or judgments, the rate of interest
(Art. 2209); or on the principal amount shall be the
2. Interest due shall earn legal interest from prevailing legal interest prescribed by
the time it is judicially demanded, although the Bangko Sentral ng Pilipinas, which
the obligation may be silent upon this point. shall be computed from default, i.e., from
(Art. 2212) extrajudicial or judicial demand in
accordance with Article 1169 of the Civil
Code, UNTIL FULL PAYMENT, without
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compounding any interest unless Can the stipulated interest be modified?

compounded interest is expressly Any modification of stipulated interest (e.g., allowing
stipulated by law or regulation. the creditor to unilaterally increase or decrease the
a. Interest due on the principal interest rate at any time) must be mutually agreed
amount accruing as of judicial upon, otherwise, it has no binding effect. Further, a
demand shall SEPARATELY earn borrower may not be required to prepay the loan if
legal interest at the prevailing he is not agreeable to the arbitrary interest rates
rate prescribed by the Bangko being imposed. (Spouses Silos v. PNB, G.R. No.
Sentral ng Pilipinas, from the 181045, 2014)
time of judicial demand UNTIL
FULL PAYMENT. What is a usury?
3. When the obligation, not constituting a It may be defined as contracting for or receiving
loan or forbearance of money, goods, something in excess of the amount allowed by law
credits or judgments, is breached, an for the loan or forbearance of money, goods or
interest on the amount of damages chattels. (De Leon, citing Tolentino v. Gonzales, 50
awarded may be imposed in the Phil. 558 (1927)).
discretion of the court at the prevailing
legal interest prescribed by the Bangko When is the Usury Law’s effectivity suspended?
Sentral ng Pilipinas, pursuant to Articles The Monetary Board of Central Bank issued CB
2210 and 2011 of the Civil Code. No Circular 905, effective January 1, 1983, removed the
interest, however, shall be adjudged on ceilings on interest rate on loans or forbearance of
unliquidated claims or damages until the money, goods, or credit. The Circular did not repeal
demand can be established with nor in any way amend the Usury Law but simply
reasonable certainty. suspended the latter’s effectivity. Interest can now
4. Accordingly, where the amount of the claim be charged as lender and borrower may agree
or damages is established with upon. (Medel v. Court of Appeals, G.R. No. 131622,
reasonable certainty, the prevailing legal November 27, 1998)
interest shall begin to run from the time
the claim is made extrajudicially or While it is true that the interest ceilings set by the
judicially (Art. 1169, Civil Code) UNTIL Usury Law are no longer in force, it has been held
FULL PAYMENT, but when such certainty that PD 1684 and CB Circular 905 merely allow
cannot be so reasonably established at contracting parties to stipulate freely on any
the time the demand is made, the interest adjustment in the interest rate on a loan by
shall begin to run only from the date of the forbearance of money but do not authorize a
judgment of the trial court (at which time unilateral increase of the interest rate by one party
the quantification of damages may be without the other's consent (PNB v. CA, G.R. No. L-
deemed to have been reasonably 26001, 1968). To be valid, therefore, any change of
ascertained) UNTIL FULL PAYMENT. interest must be mutually agreed upon by the parties
5. The actual base for the computation of (Dizon v. Magsaysay, G.R. No. L-23399, 1974)
the interest shall, in any case, be on the
principal amount finally adjudged, Q: Is the interest payment of 5% per month
without compounding any interest unless excessive?
compounded interest is expressly A: YES. 5% per month or 60% per annum interest
stipulated by law or regulation. rate is void for being unconscionable, the interest
rate prescribed by the Bangko Sentral ng Pilipinas
Must the manner of compounding the interest (BSP) for loans or forbearances of money, credits
also be in writing? or goods will be the surrogate or substitute rate not
In a loan agreement, compounding of interest has to only for the one-year interest period agreed upon
be in writing to be valid. Payment of monetary but for the entire period that the loan of Zenaida
interest shall be due only if: (1) there was an express remains unpaid. (Bulatao v. Estonactoc, G.R. No.
stipulation for the payment of interest; and (2) the 235020, 2019)
agreement for such payment was in writing. The first
requirement does not only entail reducing in writing What is the consequence of having usurious
the interest rate to be earned but also the manner of interest?
earning the same, if it is to be compounded. (Albos In usurious loans, the entire obligation does not
v. Embisan, G.R. No. 210831, 2014) become void because of an agreement for usurious
interest; the unpaid principal debt still stands and
remains valid but the stipulation as to the
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usurious interest is void. Consequently, the debt cannot be left to the will of one of them. (Vasquez v.
is to be considered without stipulation as to the PNB, G.R. Nos. 228355 & 228397, August 28,
interest. (First Metro Investment Corp. v. Este Del 2019)
Sol Mountain Reserve, Inc., G.R. No. 141811, 2001)
B. DEPOSIT
The principal debt remaining with stipulation for
payment of interest can thus be recovered. In case Deposit is constituted from the moment a person
of judicial or extrajudicial demand, and the debtor receives a thing belonging to another, with the
incurs in delay, the debt earns legal interest from the obligation of safely keeping it and of returning the
date of the demand. Such interest is not due to same (Art. 1962).
stipulation, for there was none, the same being void. NOTE: Safekeeping must be the principal purpose
Rather, it is due to the general provision of law that of the contract. Otherwise, it is not a deposit.
in obligations to pay money, where the debtor incurs
in delay, he has to pay interest by way of damages Characteristics
(Art. 2209, Civil Code) 1. Real - because it is perfected only by the delivery
of the subject matter
Distinguish escalation clauses from floating rate a. BUT: An agreement to constitute a deposit
of interest clauses. (Security Bank Corp. v. is binding and enforceable, since it is
Spouses Mercado, 2018) merely consensual
ESCALATION FLOATING RATE OF 2. Unilateral - if gratuitous
CLAUSES INTEREST 3. Bilateral - if with compensation
These are stipulations It refers to the variable
which allow for the interest rate stated on Creation of deposit (Art. 1964)
increase (as well as the a market-based 1. By virtue of a court order; or
mandatory decrease) of reference rate agreed 2. By law
the original fixed interest upon by the parties. 3. By the will of the parties
rate.
This pertains to the Kinds of Deposit
It is the method by which interest rate itself that 1. Judicial - when an attachment or seizure of
fixed rates may be is not fixed. property in litigation is ordered
increased 2. Extrajudicial (Art. 1967)
a. Voluntary - delivery is made by the will of
Q: Petitioner X was granted a loan by Bank A the depositor or by two or more persons
secured by a real estate mortgage. The interest each of whom believes himself entitled to
rate agreed upon by the parties was 17% per the thing deposited
annum. When X failed to pay some b. Necessary - made in compliance with a
amortizations, Bank A unilaterally escalated the legal obligation, or on the occasion of any
interest rate from 17% to 24% without the calamity, or by travelers in hotels and inns
knowledge of X or even an explanation as to why or by travelers with common carriers. There
the interest rates were increased. X filed a is lack of free choice in the depositor.
complaint against Bank A. Bank A defended the
escalation, saying it was based on a stipulation General Rule: A deposit is generally gratuitous (Art.
in the loan agreement that the interest rate 1965).
would be subjected to escalations. Was the Exceptions: [JESS]
escalation of interest rate made by Bank A 1. When there is a contrary Stipulation
valid? 2. Where depositary is Engaged in the business of
storing goods
A: No. Even though there was a stipulation in the 3. Where property is Saved from destruction
loan agreement that the in the loan agreement that without knowledge of the owner
the interest rate would be subjected to escalations, 4. Judicial deposit
Bank A failed to explain how it arrived to such
interest rates. While escalation clauses are not
wrong, they must not be solely potestative and
should be based on reasonable grounds. Further,
the interest rate imposed upon Petitioner X is
violative of the principle of mutuality of contracts.
Art. 1308 of the Civil Code provides that a contract
must bind both parties; its validity or compliance
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owner, wherever he goes and not

JUDICIAL EXTRA- susceptible of custody
JUDICIAL b. Exception: In judicial deposit, it may
Creation Will of the Will of the cover both movable and immovable
court contracting property
parties 2. As to ownership
Purpose Security or to Custody and a. General rule: The depositor must be
ensure the safekeeping the owner of the thing deposited
right of a party b. Exceptions: It may belong to another
to the property person than the depositor
or to recover i. When two or more persons claiming
in case of to be entitled to a thing may deposit
favorable the same with a third person. In such
judgment case, the third person assumes the
Subject Movable or Movables only obligation to deliver to the one to
Matter immovable whom it belongs.
property, but ii. Interpleader – the action to compel
generally the depositors to settle their
immovable conflicting claims. Here, one of the
Cause Always May be depositors is not the owner.
onerous compensated
but generally Form of Contract of Deposit
gratuitous General rule: A contract of deposit may be entered
into (but not perfected) orally or in writing (Art. 1969)
Return of Upon order of Gratuitous: However: Delivery of the thing deposited is needed
thing the court / end demand of for perfection.
of litigation depositor
(Art. 1988) or DEPOSITARY DEPOSITARY
return by CAPACITATED, INCAPACITATED,
depositary for DEPOSITOR DEPOSITOR
justifiable INCAPACITATED CAPACITATED
reasons (Art. Depositary is subject to Depositary does not
1989) ALL the obligations of a incur the obligations of
Compensated: depositary a depositary
The Depositary must return Depositary, however,
depositary the property either to: is liable to:
may retain the a) The legal a) Return the
thing in pledge representative thing
until full of the deposited
payment of incapacitated; while still in
what may be OR his
due him by b) The depositor possession;
reason of himself if he AND
deposit (Art. should acquire b) Pay the
1994) capacity depositor the
In whose Person who Depositor or amount by
behalf it is has a right 3rd person which he may
held designated have
benefited
Subject Matter of Deposit (Art. 1966) himself with
1. As to the thing itself the thing or its
a. General rule: Only movable or personal price (subject
property may be the object of deposit to the right of
(whether voluntary or necessary); any 3rd person
however, deposit does not include who acquires
incorporeal/intangible property, such the thing in
as rights and actions, for it follows the good faith)
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Conversion of Deposit to Mutuum 17. Liability in case of alienation of depositary’s

If the thing deposited is money or other consumable heir
thing, the permission to use it will result in its Two primary obligations (Art. 1972)
consumption and converts the contract into a simple 1. Safekeeping of the object
loan or mutuum. However, if safekeeping is still the a. Degree of Care – same diligence as he
principal purpose of the contract, it is still a deposit would exercise over his property
but an irregular one; hence, an Irregular Deposit. (ordinary diligence)
Example: Bank deposit (De Leon) b. NOTE: The depositary cannot excuse
himself from liability, in the event of loss,
BASIS IRREGULAR MUTUUM by claiming that he exercised the same
DEPOSIT amount of care toward the thing
Demandability Demandable Lender is deposited as he would towards his own
at will of the bound by the if such care is less than that required by
irregular provisions of the circumstances.
depositor for the contract 2. Return of the thing
whose benefit and cannot
the deposit seek Obligation not to Transfer deposit (Art. 1973)
has been restitution 1. General rule: The depositary is not allowed
constituted until the time to deposit the thing with a third person.
of payment a. Reason: A deposit is founded on trust
as provided in and confidence and it can be supposed
the contract that the depositor, in choosing the
has arisen depositary, has taken into consideration
(except under the latter’s qualification
Art. 1198) 2. Exception: The depositary is authorized by
Benefit Benefit If with express stipulation
accrues to the interest,
depositor benefit of Liabilities: Depositary is liable for loss of the thing
both parties deposited when:
a) He transfers the deposit with a third person
Obligations of the Depositary without being authorized to do so although
1. Safekeep the thing deposited there is no negligence on his part and the
2. Return the thing on the date stipulated or third person;
when depositor claims it b) He deposits the thing with a third person
3. Not to transfer deposit who is manifestly careless or unfit although
4. Not to change the way of deposit authorized, even in the absence of
5. To collect on the choses in action deposited negligence; or
6. Not to commingle things if so stipulated c) The thing is lost through the negligence of
7. Not to make use of the things so deposited his employees whether the latter are
8. Liability for loss through fortuitous event in manifestly careless or not.
certain cases
9. Obligation when the thing is closed and Exemption from liability: The thing is lost without
sealed the negligence of the third person with whom he was
10. To return products, accessories and allowed to deposit the thing if such third person is
accessions not “manifestly careless or unfit” (e.g., minor).
11. To pay interest on sums converted to
personal use Obligation not to change the way of deposit
12. Cannot require that the depositor prove his a) General rule: Depositary may not change
ownership over the thing the way of the deposit. (Art. 1974)
13. Obligation when third person appears to be b) Exception: If there are circumstances
the owner indicating that the depositor would consent
14. Obligation when there are two or more to the change. This is a situation wherein
depositors the depositary would reasonably presume
15. To return to the person to whom return that the depositor would agree to the
must be made change if he knows of the facts of the
16. Liability in case of loss by force majeure or situation (Art. 1974)
government order
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Requisites: A. Effect of unauthorized use: Liability for

a) The depositary must notify the depositor of damages
such change; and B. Effects of authorized use: (Art. 1978)
b) Must wait for the reply of the depositor to I. If the thing deposited is non-
such change. consumable
NOTE: These requisites may not be dispensed with 1. General rule: The contract
unless delay would cause danger. loses the character of a
deposit and acquires that of a
Obligation to Collect Interest on the choses in commodatum, despite the
action deposited (Art. 1975) fact that the parties may have
a) If the thing deposited should earn interest, denominated it as a deposit
the depositary is under the obligation to: 2. Exception: Safekeeping is
i. Collect the interest as it becomes due. still the principal purpose of
ii. Take such steps as may be necessary the contract
to preserve its value and the right II. If the thing deposited is money or
corresponding to it. other consumable thing:
b) The depositary is bound to collect the 1. General rule: Converts the
capital, as well as the interest, when due. contract into a simple loan or
NOTE: The obligation to collect in the choses in mutuum
action does not apply to contracts for the rent of 2. Exception: Safekeeping is
safety deposit boxes. still the principal purpose of
the contract, but it becomes
Contract of rent of safety deposit boxes (Art. an irregular deposit. Bank
1975) deposits are in the nature of
• A contract for the rent of safety deposit irregular deposits, but they
boxes is not an ordinary contract of lease of are really loans governed by
things, but a special kind of deposit; hence, the law on loans.
it is not to be strictly governed by the
provisions on deposit. An instrument acknowledging receipt of a sum of
• The prevailing rule in the US is that the money as a deposit returnable two months after
relation between a bank renting out safety notice with interest is evidence of a contract of loan
deposit boxes and its customer with and not of deposit. (Gavieres v. Pardo de Tavera,
respect to the contents of the box is that of G.R. No. 6, [November 14, 1901], 1 PHIL 71-73)
bailor and bailee.
Liability for Loss through fortuitous event (Art.
Obligation not to Commingle things if so 1979)
stipulated (Art. 1976) General rule: Depositary is not liable for loss of the
General rule: The depositary is permitted to thing deposited through a fortuitous event without
commingle grain or other articles of the same kind his fault (Art. 1174)
and quality Exceptions: (USDA)
Effects: a) If it is so Stipulated
a) The various depositors of the mingled
b) If he Uses the thing without the depositor’s
goods shall own the entire mass in
permission
common
c) If he Delays in its return
b) Each depositor shall be entitled to such
d) If he Allows others to use it, even though
portion of the entire mass as the amount
deposited by him bears the whole he himself may have been authorized to
Exception: When there is a stipulation to the use the same
contrary
NOTE: Liability for loss without fortuitous event:
Depositary presumed at fault since he is in
Obligation not to make Use of the things
possession (Art. 1265)
deposited (Art. 1977)
General rule: Deposit is for safekeeping of the
subject matter and not for its use Relation between bank and depositor (Art. 1980)
Fixed, savings, and current deposits of money in
Exceptions:
1. Expressly authorized by the depositor banks and similar institutions shall be governed by
2. Such use is necessary for its preservation the provisions concerning simple loan.
but limited for the purpose only
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a) Contract of loan – deposits in banks are a. General rule: The depositary may
really loans because the bank can use the return the thing to any one of the
same for its ordinary transactions solidary depositors
b) Relation of creditor and debtor – the b. Exception: When a demand,
relation between a depositor and a bank is judicial or extrajudicial, for its
that of a creditor and a debtor. return has been made by one of
them in which case delivery should
[A] bank has a right of set off of the deposit in its be made to him
hands for the payment of any indebtedness to it on 3. Return to one of the depositors stipulated
the part of the depositor. (Gullas v. Philippine a. If by stipulation, the thing should
National Bank, G.R. No. 43191, [November 13, be returned to one of the
1935], 62 PHIL 519-523) depositors, the depositary is
bound to return it only to the
Obligation when the thing deposited is Closed person designated, although he
and Sealed (Art. 1981) has not made any demand for its
The depositary has the obligation to: return
a) Return the thing deposited when delivered
closed and sealed in the same condition. Obligation to Return to the person to whom
b) Pay for damages should the seal or lock be return must be made (Art. 1986)
broken through his fault, which is presumed 1. The depositary is obliged to return the thing
unless proven otherwise. deposited, when required, to:
c) Keep the secret of the deposit when the a. The depositor;
seal or lock is broken, with or without his b. To his heirs or successors; or
fault. c. To the person who may have been
designated in the contract.
When depositary justified in opening closed and 2. If the depositor was incapacitated at the
sealed subject matter (Art. 1982): time of making the deposit, the property
a) The depositary is presumed authorized to must be returned to:
do so if the key has been delivered to him. a. His guardian or administrator
b) When the instructions of the depositor as b. To the depositor himself should he
regards the deposit cannot be executed acquire capacity
without opening the box or receptacle 3. Even if the depositor had capacity at the
(Necessity). time of making the deposit, but he
subsequently loses his capacity during the
Where Third person appears to be the owner deposit, the thing must be returned to his
(Art. 1984) legal representative.
The depositary may be relieved from liability
when: Obligation to return at the Place of return
a) He advised the true owner of the thing of General rule: At the place agreed upon by the
the deposit parties, transportation expenses shall be borne by
b) If the owner, in spite of such information, the depositor (Art. 1987)
does not claim it within the period of one Exception: In the absence of stipulation, at the
month (30 days), and the depositary place where the thing deposited might be even if it
returns the thing deposited to the depositor. should not be the same place where the original
deposit was made
Obligation of the depositary when there are two NOTE: Same as the general rule of law regarding
or more depositors (Art. 1985) the place of payment (Art. 1251)
1. Divisible thing and joint depositors – each
one of the depositors can demand only his Obligation to return upon the Time of return (Art.
share proportionate thereto 1988)
a. General rule: Each one of the General rule: The thing deposited must be returned
depositors may do whatever may to the depositor upon demand, even though a
be useful to the others (Art. 1212) specified period of time for such return may have
b. Exception: Anything which may been fixed
be prejudicial to the other
depositors Exceptions:
2. Indivisible thing or solidary depositors – a) When the thing is judicially attached while
rules on active solidarity in the depositary’s possession
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b) When notified of the opposition of a third pledge. However, after payment of the debt
person to the return or the removal of the and expenses, the remainder of the price of
thing deposited the sale shall be delivered to the obligor.
(Art. 2121)
Right of the depositary to return the Thing 2. These may be sold only after demand of the
deposited (Art. 1989) amount for which the thing is retained. The
NOTE: In this case, it is the depositary returning the public auction shall take place within one
deposit with or without the demand of the month after such demand. If, without just
depositor. grounds, the creditor does not cause the
General rule: The depositary may return the thing public sale to be held within such period,
deposited, notwithstanding that a period has been the debtor may require the return of the
fixed for the deposit, if: thing. (Art. 2122)
a) The deposit is gratuitous
b) The reason is justifiable Obligations of the Depositor (PLD)
• Remedy if depositor refuses to receive the 1. Obligation to Pay expenses of preservation (Art.
thing: The depositary may deposit the thing 1992)
at the disposal of the judicial authority. Applies only when the deposit is gratuitous
2. Obligation to pay Losses incurred due to
Exception: When the deposit is for a valuable character of thing deposited (Art. 1993)
consideration, the depositary has no right to return General rule: The depositary must be
the thing before the expiration of the time reimbursed for loss suffered by him because of
designated even if he should suffer inconvenience the character of the thing deposited.
as a consequence. Exceptions:
Depositary’s liability in case of Loss by force a. Depositor was not aware of the danger.
majeure or government order (Art. 1990) b. Depositor was not expected to know the
Depositary is not liable in cases of loss by force dangerous character of the thing.
majeure or by government order. However, he has c. Depositor notified the depositary of such
the duty to deliver to the depositor money or another dangerous character.
thing he receives in place of the thing. d. Depositary was aware of the danger
without advice from the depositor.
Liability in case of alienation by the depositary’s 3. Effect of Death of depositor or depositary(Art.
Heir (Art. 1991) 1995)
• When alienation is done in good faith: a. Deposit gratuitous – death of either of the
a) Return the value of the thing deposited; depositor or depositary extinguishes the
or deposit (personal in nature). By the word
b) Assign the right to collect from the “extinguished,” the law really means that
buyer the depositary is not obliged to continue
• The heir does not need to pay the with the contract of deposit.
actual price of the thing deposited. b. Deposit for compensation – not
extinguished by the death of either party
• When alienation is done in BAD FAITH:
a) Liable for damages; and Extinguishment of Deposit
b) Pay the actual price of the thing 1. Upon the loss or deterioration of the thing
deposited deposited;
2. Upon the death of the depositary, only in
Depositary may retain the thing in his gratuitous deposits;
possession until the full payment of what may 3. Other provisions in the Civil Code
be due him by reason of the deposit (Art. 1994) (novation, merger, etc.)
The thing retained serves as security for the
payment of what may be due to the depositary by Extrajudicial Deposit: Necessary Deposit
reason of the deposit (see Arts. 1965, 1992 & When deposit is Necessary: (PLCT)
1993). 1. It is made in compliance with a Legal
obligation
Pledges created by operation of law (Art. 2. It takes place on the occasion of any
2121) Calamity, such as fire, storm, flood, pillage,
1. These are governed by the foregoing articles shipwreck, or other similar events
on the possession, care and sale of the
thing as well as on the termination of the
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a. There must be a causal relation Extent of liability:

between the calamity and the a) Liability in hotel rooms which come
constitution of the deposit. under the term “baggage” or articles
3. Made by Passengers with common carriers such as clothing as are ordinarily used
a. As to baggage the passengers or by travelers
their agents carry b) Include those lost or damages in hotel
4. Made by Travelers in hotels or inns (Art. annexes such as vehicles in the hotel’s
1998) garage.
a. Before keepers of hotels or inns
may be held responsible as When the traveler avails of the valet service of
depositaries with regard to the hotels. The contract of deposit is perfected from the
effects of their guests, the traveler’s delivery of the keys to the vehicle to the
following must concur: hotel, who has the obligation to safely keep and
return it to the owner. Loss of the vehicle on the
Elements: hotel’s premises or annexes may give rise to a claim
a. They have been previously informed about the of damages (Durban Apartments v. Pioneer
effects brought by the guests; and Insurance, G.R. No. 179419, 2011).
• Is notification required before the common When hotelkeeper liable: (Arts. 2000 – 2002)
carrier becomes liable for lost belongings NOTE: In the following cases, the hotel-keeper is
that remained in the custody of the liable regardless of the amount of care exercised:
passenger? NO. a) The loss or injury to personal property is
Actual delivery of the goods to the caused by his servants or employees as
innkeepers or their employees is well as by strangers (Art. 2000)
unnecessary before liability could attach to b) The loss is caused by the act of a thief or
the hotelkeepers in the event of loss of robber done without the use of arms or
personal belongings of their guests irresistible force (Id., Art. 2001)
considering that the personal effects were
inside the hotel or inn because the Reason: Hotelkeeper is apparently negligent.
hotelkeeper shall remain accountable.
Accordingly, actual notification was not When hotelkeeper not liable:
necessary to render the petitioner as the a) The loss or injury is caused by force
common carrier liable for the lost personal majeure, like flood, fire, theft or robbery by
belongings of Sesante. By allowing him to a stranger (not the hotel-keeper’s servant
board the vessel with his belongings or employee) with the use of firearms or
without any protest, the petitioner became irresistible force
sufficiently notified of such belongings. So a. Exception: Unless the hotel-
long as the belongings were brought inside keeper is guilty of fault or
the premises of the vessel, the petitioner negligence in failing to provide
was thereby effectively notified and against the loss or injury from his
consequently duty-bound to observe the cause
required diligence in ensuring the safety of b) The loss is due to the acts of the guests, his
the belongings during the voyage. Applying family, servants, visitors
Article 2000 of the Civil Code, the petitioner c) The loss arises from the character of the
assumed the liability for loss of the things brought into the hotel
belongings caused by the negligence of its
officers or crew. In view of our finding that Exemption or diminution of liability:
the negligence of the officers and crew of The hotelkeeper cannot free himself from
the petitioner was the immediate and responsibility by posting notices to the effect that he
proximate cause of the sinking of the M/V is not liable for the articles brought by the guest (Art.
Princess of the Orient, its liability for 2003)
Sesante's lost personal belongings was
beyond question. (Sulpicio Lines v. Effect: Any stipulation between the hotel-keeper
Sesante, 2016) and the guest whereby the responsibility of the
b. The guests have taken the precautions former (as set forth in Arts. 1998-2001) is
prescribed regarding their safekeeping. suppressed or diminished shall be void.
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Hotel-keeper’s right to retain

The hotel-keeper has a right to retain the things in BASIS JUDICIAL EXTRA-
pledge brought into the hotel by the guest, as a DEPOSIT JUDICIAL
security for credits on account of: DEPOSIT
a) Lodging Cause or By will of the By will of the
b) Supplies usually furnished to hotel guests origin courts parties.
Hence, there
Reason: It is given to hotel-keepers to compensate is a contract
them for the liabilities imposed upon them by law. Purpose. Security; Custody;
The right of retention recognized in this Article is in Secure the Safekeeping
the nature of a pledge created by operation of law. right of a party of the thing
• In compliance with a legal obligation (governed to recover in
by the law establishing it, and in case of case of
deficiency, the rules on voluntary deposit e.g. favorable
Arts. 538, 586 and 2104). judgment.
• Made on the occasion of any calamity Subject Either Only movable
(governed by the rules on voluntary deposit and Matter movable or property
Art. 2168). immovable
property but
Hotel-keeper’s right to sell generally,
A thing under a pledge by operation of law may be immovable
sold only after demand of the amount for which the Remuneration Always Generally
thing is retained. The public auction shall take place remunerated gratuitous, but
within one month after such demand. If, without just (onerous) may be
grounds, the creditor does not cause the public sale compensated
to be held within such period, the debtor may require In whose In behalf of In behalf of
the return of the thing. (Art. 2122) behalf it is the person the depositor
held who, by the or third
Sequestration or judicial deposit judgment, has person
When judicial deposit takes place: When an a right designated
attachment or seizure of property in litigation is
ordered by a court. (Art. 2005)
Nature: Auxiliary to a case pending in court.
Purpose: To maintain the status quo during the
pendency of the litigation or to insure the right of the
parties to the property in case of a favorable
judgment
Depositary of sequestered property: person

appointed by the court. (Art. 2007)
Obligations:
1. To take care of the property with the
diligence of a good father of the family. (Art.
2008)
2. He may not be relieved of his responsibility
until the litigation is ended or the court so
orders. (Art. 2007)
Applicable law: The law on judicial deposit is

remedial or procedural in nature. Hence, the Rules
of Court are applicable. (Art. 2009)
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COMMODATUM MUTUUM DEPOSIT BARTER

Non-consumable
(movable or
immovable) Fungible /
Movable / personal Non-consumable or
Object consumable
property consumable
Except: consumable (e.g., money)
if used for exhibition
purposes only
Temporary use of the

Purpose Consumption Safekeeping Exchange (sale)
thing
Take care of the thing

Take care of the thing
with due diligence
Do not use the thing
Return a thing of the Deliver another thing
Obligation deposited unless
Return the thing upon same kind and quality in exchange
authorized or is
expiration of period or
required for its
purpose
preservation
Passes to the other
Status of Retained by the
Retained by bailor Passes to bailee party (mutual
Ownership depositor
exchange)
Anytime, if no period
or purpose has been
agreed upon or if by Only after the Cannot demand
mere tolerance only expiration of the Anytime return because
(precarium) period Exception: for contract is already
Ability to
Exception: when the compensation extinguished
demand return
If there is an urgent debtor loses every (depositary has right
necessity right to make use of of retention) Rescission only if
the period (Art. 1198) grounds exist
Acts of ingratitude by
the bailee
C. GUARANTY AND SURETYSHIP b. It may be entered into even without the

intervention of the principal debtor.
NATURE AND EXTENT OF GUARANTY 4. Distinct Person – a person cannot be the
personal guarantor of himself
Guaranty – By guaranty, a person called the • The liability of a guarantor is only subsidiary,
guarantor, binds himself to the creditor, to fulfill the and all the properties of the principal debtor
obligation of the principal debtor in case the latter must first be exhausted before the guarantor
should fail to do so. It is a contract between the may be held answerable for the debt. Thus,
guarantor and the creditor. (Art. 2047) the creditor may hold the guarantor liable
only after judgment has been obtained
Characteristics of the contract against the principal debtor and the latter is
1. Accessory – dependent for its existence upon unable to pay. (Aglibot vs. Santia, G.R. No.
the principal obligation guaranteed by it hence if 185945, 2012)
principal contract is void, then guaranty is also
void Cause of Contract of Guaranty
2. Subsidiary and Conditional – takes effect only 1. Presence of cause which supports principal
when the principal debtor fails in his obligation obligation: Cause of the contract is the same
subject to limitation cause which supports the obligation as to the
3. Unilateral – principal debtor. The consideration which
a. It gives rise only to a duty on the part of the supports the obligation as to the principal debtor
guarantor in relation to the creditor and not is a sufficient consideration to support the
vice versa obligation of a guarantor or surety.
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2. Absence of direct consideration or benefit to Guaranty of Future Debts (Art. 2053)

guarantor: Guaranty or surety agreement is
regarded valid despite the absence of any direct Continuing Guaranty or Suretyship:
consideration received by the guarantor or 1. Not limited to a single transaction but which
surety, such consideration need not pass directly contemplates a future course of dealings,
to the guarantor or surety; a consideration covering a series of transactions generally for
moving to the principal will suffice. an indefinite time or until revoked.
2. It is prospective in its operation and is generally
EFFECTS OF GUARANTY intended to provide security with respect to
future transactions.
Married woman as Guarantor (Art. 2049) 3. Future debts, even if the amount is not yet
General rule: Married woman binds only her known, may be guaranteed but there can be no
separate property claim against the guarantor until the amount of
Exceptions: the debt is ascertained or fixed and
1. With her husband’s consent, binds the demandable.
community or conjugal partnership property
2. Without husband’s consent, in cases provided Examples:
by law, such as when the guaranty has a. To secure the payment of a loan at maturity
redounded to the benefit of the family – guarantee of the punctual payment of a loan
at maturity and all other obligations of
Guaranty Undertaken Without Knowledge of indebtedness
Debtor (Art. 2050) b. To secure payment of any debt to be
Rights of third persons who pay: subsequently incurred –construed as
1. Payment without the knowledge or against continuing when it is evident from the terms that
the will of the debtor: the object is to give a standing credit to the
a. Guarantor can recover only insofar as the principal debtor to be used from time to time
payment has been beneficial to the debtor either indefinitely or until a certain period,
(Art. 1236) especially if the right to recall the guaranty is
b. Guarantor cannot compel the creditor to expressly reserved.
subrogate him in his rights (Art. 1237)
2. Payment with knowledge or consent of the Guaranty of Conditional Obligations
debtor: Subrogated to all the rights which the A guaranty may secure all kinds of obligations, be
creditor had against the debtor (Art. 2067) they pure or subject to a suspensive or resolutory
condition.
Double or Sub-Guaranty (Art. 2051(2)) 1. Principal obligation subject to a suspensive
One constituted to guarantee the obligation of a condition – the guarantor is liable only after the
guarantor. It should not be confounded with fulfillment of the condition.
guaranty wherein several guarantors concur. 2. Principal obligation subject to a resolutory
condition – the happening of the condition
Guaranty of Voidable, Unenforceable, And extinguishes both the principal obligation and
Natural Obligations (Art. 2052(2)) the guaranty
A guaranty may secure the performance of:
1. Voidable contract – such contract is binding, Guarantor’s Liability Cannot Exceed Principal
unless it is annulled by a proper court action Obligation (Art. 2054)
2. Unenforceable contract – because such General rule: Guaranty is a subsidiary and
contract is not void accessory contract – guarantor cannot bind
3. Natural obligation – the creditor may proceed himself for more than the principal debtor, both as
against the guarantor although he has no right regards the amount and the onerous nature of
of action against the principal debtor for the contract
reason that the latter’s obligation is not civilly • If he does, his liability shall be reduced to the
enforceable. limits of that of the debtor.
• When the debtor himself offers a guaranty • But the guarantor may bind himself for less
for his natural obligation, he impliedly than that of the principal.
recognizes his liability, thereby Exceptions:
transforming the obligation from a natural 1. Interest, judicial costs, and attorney’s fees
into a civil one. as part of damages may be recovered –
creditors may recover from the surety as part of
their damages the abovementioned fees even
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without stipulation and even if the surety would which are set forth or which may be inferred
thereby become liable to pay more than the from the contract of guaranty or suretyship, and
total amount stipulated in the bond. no further.
Reason: Surety is made to pay, not by reason 3. Liability of surety to expire on maturity of
of the contract, but by reason of his failure to principal obligation – such stipulation is unfair
pay when demanded and for having and unreasonable for it practically nullifies the
compelled the creditor to resort to the nature of the undertaking it had assumed.
courts to obtain payment.
Interest runs from (demand): Remedy of surety: Foreclose the counter-bond put
a. Filing of the complaint (upon judicial up by the principal debtor (if there is any)
demand); or
b. The time demand was made upon the Guaranty Distinguished from Suretyship
surety until the principal obligation is fully GUARANTY SURETYSHIP
paid (upon extra-judicial demand) Liability depends upon Assumes liability as a
2. Penalty may be provided – surety may be held an independent regular party to the
liable for the penalty provided for in a bond for agreement to pay the undertaking
violation of the condition therein. obligation if the
principal debtor fails
Principal’s Liability May Exceed Guarantor’s to do so
Obligations Engagement is a Charged as an original
The amount specified in a surety bond as the collateral undertaking promisor
surety’s obligation does not limit the extent of the Secondarily liable – Primarily liable –
damages that may be recovered from the principal, he contracts to pay if, undertakes directly for
the latter’s liability being governed by the obligations by the use of due the payment without
he assumed under his contract. diligence, the debt reference to the
cannot be paid solvency of the
Guaranty Not Presumed (Art. 2055) principal, and is so
The assumption of guaranty must be expressed. It responsible at once the
cannot extend to more than what is stipulated latter makes default,
therein. without any demand by
the creditor upon the
Guaranty Covered by the Statute of Frauds principal whatsoever or
• Guaranty must not only be expressed but must any notice of default
so be reduced into writing. Only binds himself to Undertakes to pay if
• Hence, it shall be unenforceable by action, pay if the principal the principal does not
unless the same or some note or memorandum cannot or is unable to pay, without regard to
thereof be in writing, and subscribed by the pay his ability to do so
party charged, or by his agent; evidence, Insurer of the Insurer of the debt
therefore, of the agreement cannot be received solvency of the debtor
without the writing, or secondary evidence of its Does not contract that Pay the creditor
contents. (Macondray & Co., Inc. v. Piñon, G.R. the principal will pay, without qualification
No. L-13817, 1961) but simply that he is if the principal debtor
• It need not appear in a public document. able to do so does not pay. Hence,
the responsibility or
Guaranty Strictly Construed obligation assumed by
Strictly construed against the creditor in favor of the surety is greater or
the guarantor and is not to be extended beyond its more onerous than that
terms or specified limits. Doubt in the terms and of a guarantor
conditions of the guaranty or suretyship agreement Guarantor can avail of Surety cannot avail the
should be resolved in favor of the guarantor or the benefit of benefit of excussion
surety. excussion and division and division.
1. Liability for obligation stipulated – guarantor in case the creditor
is not liable for obligations assumed previous proceeds against him.
to the execution of the guaranty unless an Not bound to take Held to know every
intent to be so liable is clearly indicated. notice of the non- default of the principal.
2. Liability of surety limited to a fixed period – performance of the
the surety must only be bound in the manner principle
and to the extent, and under the circumstances
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Q: Corp A secured a Performance Bond from Exception: When the creditor waives the
Corp B wherein the latter would become the requirements.
surety of the former, guaranteeing the
performance of Corp A’s obligations in favor of Effect of Subsequent Loss of Required
a contract with Corp C. However, Corp A showed Qualifications
poor progress, which led to Corp C demanding The qualifications need only be present at the time
Corp B to liquidate the Performance Bond, of the perfection of the contract. The subsequent
without specifying the exact amount claimed. loss of the qualifications would not extinguish the
Subsequently, Corp C terminated the contract liability of the guarantor, nor will it extinguish the
with Corp A. When negotiations for amicable contract of guaranty.
settlement fell through, Corp B denied Corp C’s
claim. This prompted Corp C to file a complaint Remedy of creditor: Demand another guarantor
with the CIAC to collect a sum of money against with the proper qualifications.
Corp A and Corp B. The CIAC dismissed the
Complaint because it was not within a Exception: Creditor may waive it if he chooses and
reasonable period and such delay had released hold the guarantor to his bargain.
Corp B from its liability as per Article 2080 of the
Civil Code. This was reversed by the CA on the Guarantor Convicted of a Crime Involving
ground that Corp A had long been in default of Dishonesty or Became Insolvent (Art. 2057):
its obligations even before the first demand of 1. Requires conviction in the first instance of a
Corp C, which meant that the liability of Corp B crime involving dishonesty to have the right to
as surety had already arisen. Was the CA correct demand another.
in saying that Corp B was liable? 2. Judicial declaration of insolvency is not
necessary in order for the creditor to have a
A: Yes. A contract stands as the law between the right to demand another guarantor.
parties for as long as it is not contrary to law, morals,
good customs, public order, or public policy. The The supervening incapacity of a guarantor does not
Performance Bond provides that upon Corp C’s first terminate the guaranty for it merely gives the
demand, Corp B as surety shall indemnify the creditor the option to demand another guarantor. He
former notwithstanding any dispute with regard to is not bound to substitute the guarantor. (Estate of
whether the principal has complied with his Hemady v. Luzon Surety, G.R. No. L-8437, 1956)
obligation. The Performance Bond thus stands as a
contract of surety contemplated under Article 2047 Selection of Guarantor
of the Civil Code which defines a surety wherein a 1. Specified person stipulated as guarantor:
person binds himself solidarily with the principal Substitution of guarantor may not be demanded
debtor. As a result, the surety is considered in law Reason: The selection of the guarantor is:
as being the same party as the debtor in relation to a. A term of the agreement;
whatever is adjudged touching upon the obligation b. As a party, the creditor is, therefore, bound
of the latter, and their liabilities are interwoven as to thereby.
be inseparable. While the contract of surety stands 2. Guarantor selected by the principal debtor:
secondary to the principal obligation, the surety's Debtor answers for the integrity, capacity, and
liability is direct, primary and absolute, albeit limited solvency of the guarantor.
to the amount for which the contract of surety is 3. Guarantor personally designated by the
issued. The surety's liability attaches the moment a creditor: Responsibility for the selection
demand for payment is made by the creditor. should fall upon the creditor because he
Furthermore, Article 2080 does not apply in this considered the guarantor to have the
case because it is only applicable to the liability of a qualifications for the purpose.
guarantor. (The Mercantile Insurance Co., Inc., v.
DMCI-Laing Construction, Inc., G.R. No. 205007, Right of Guarantor to Benefit Of Excussion Or
September 16, 2019.) Exhaustion (Art. 2058)
1. Guarantor only secondarily liable –
Qualifications of an Individual Guarantor guarantor binds himself to pay only in case the
(Arts.2056-2057) (CSI) principal debtor should fail to do so. If the
1. He possesses Integrity principal debtor fulfills the obligation
2. He has the Capacity to bind himself guaranteed, the guarantor is discharged from
3. He has Sufficient property to answer for the any responsibility.
obligation which he guarantees 2. All legal remedies against the debtor to be
first exhausted – to warrant recourse against
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the guarantor for payment, it may not be i. Available property of the debtor– the
sufficient that the debtor appears insolvent. guarantor should facilitate the
Such insolvency may be simulated. realization of the excussion since he is
NOTE: Art. 2058 is not applicable to a contract of the most interested in its benefit.
suretyship. ii. Within the Philippine territory –
excussion of property located abroad
Right of Creditor to secure Judgment against would be a lengthy and extremely
Guarantor prior to exhaustion difficult proceeding and would not
General rule: An ordinary personal guarantor (NOT conform with the purpose of the
a pledgor or mortgagor who is at the same time a guaranty to provide the creditor with
guarantor), may demand exhaustion of all the the means of obtaining the fulfillment of
property of the debtor before he can be compelled the obligation.
to pay. Sufficient to cover the amount of the
debt.
Exception: The creditor may secure a judgment 7. If he is a Judicial bondsman and sub-surety
against the guarantor, who shall be entitled to a (Art. 2084) – because he is solidarily liable.
deferment of the execution of said judgment against 8. Where he has given a pledge or mortgage as a
him, until after the properties of the principal debtor Special security.
shall have been exhausted, to satisfy the latter’s
obligation. NOTE: Article 2062 of the Civil Code provides
that in every action by the creditor, which must be
Exceptions to the Benefit of Excussion (Art. against the principal debtor alone, except in the
2059) (JAWS-IS-FUN) cases mentioned in Article 2059, the former shall
1. If the guarantor has expressly Waived it. ask the court to notify the guarantor of the action.
a. Waiver is valid but it must be made in The guarantor may appear so that he may, if he
express terms.
so desire, set up such defenses as are granted
2. If he has bound himself Solidarily with the
him by law. The benefit of excussion mentioned
debtor – liability assumed that of a surety
in article 2058 shall always be unimpaired, even
Guarantor becomes primarily liable as a
solidary co-debtor. In effect, he renounces if judgment should be rendered against the
in the contract itself the benefit of principal debtor and the guarantor in case of
exhaustion. appearance by the latter.
3. In case of Insolvency of the debtor – guarantor
guarantees the solvency of the debtor Duty of Creditor to Make Prior Demand for
If the debtor becomes insolvent, the liability Payment From Guarantor (Art. 2060)
of the guarantor arises as the debtor cannot 1. When demand to be made – only after
fulfill his obligation judgment on the debt for obviously the
4. When he (debtor) has Absconded, or cannot be exhaustion of the principal’s property cannot
sued within the Philippines – the creditor is not even begin to take place before judgment has
required to go after a debtor who is hiding or been obtained.
cannot be sued in our courts
a. Exception: Debtor has left a 2. Actual demand to be made – joining the
manager or representative guarantor in the suit against the principal debtor
5. If it may be presumed that a judicial action is not the demand intended by law. There must
including execution on the property of the be an actual demand and not judicial demand.
principal debtor would not result in the (Vda. De Syquia v. Jacinto, G.R. No. 41320
satisfaction of the obligation – if such is the (1934).
case, the guarantor can no longer require the
creditor to resort to all such remedies against Duty of The Guarantor To Set Up Benefit Of
the debtor as the same would be but a Useless Excussion (Art. 2060)
formality. It is not necessary that the debtor be As soon as he is required to pay, guarantor must
judicially declared insolvent. also point out to the creditor available property
6. If he does Not comply with Art. 2060: In order (not in litigation or encumbered) of the debtor within
that the guarantor may make use of the benefit the Philippines.
of excussion, he must:
a. Set it up against the creditor upon the If a party in a contract waives his right to excussion,
latter’s demand for payment from him; the contract has ceases to be a guaranty and is now
b. Point out to the creditor: a suretyship under Article 2047 of the Civil Code.
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(Trade and Investment Development Corporation of Effects of Compromise (Art. 2063)

the Philippines v. Philippine Veterans Bank, G.R. Compromise – a contract whereby the parties, by
No. 233850, 2019) making reciprocal concessions, avoid a litigation or
put an end to one already commenced.
Duty of The Creditor To Resort To All Legal 1. Compromise between creditor and principal
Remedies (Art. 2061) debtor benefits the guarantor but does not
• After the guarantor has fulfilled the conditions prejudice him.
required for making use of the benefit of 2. Compromise between guarantor and the
exhaustion, it becomes the duty of the creditor creditor benefits but does not prejudice the
to exhaust all the property of the debtor pointed principal debtor.
out by the guarantor Reason: A compromise binds only the parties
• If he fails to do so, he shall suffer the loss but thereto and not third persons. Thus, it cannot
only to the extent of the value of the said prejudice the guarantor or debtor who was not party
property, for the insolvency of the debtor. to the compromise. But if it benefits a third person,
• Resort to all legal remedies includes accion then the compromise may bind that third person.
pauliana and accion subrogatoria, among
others. Sub-Guarantor’s Right To Excussion (Art. 2064)
Sub-guarantor enjoys the benefit of excussion with
Joinder of Guarantor and Principal As Parties respect to:
Defendant 1. Principal debtor; and
General rule: The guarantor, not being a joint 2. Guarantor
contractor with his principal, cannot be sued with
his principal. Reason: He stands with respect to the guarantor on
Exception: Where it would serve merely to delay the same footing as the latter does with respect to
the ultimate accounting of the guarantor or if no the principal debtor.
different result would be attained if the plaintiff were
forced to institute separate actions against the Benefit of Division Among Several Guarantors
principal and the guarantors. (Art. 2065)
1. In whose favor applicable - should there
Procedure When Creditor Sues (Art. 2062) be several guarantors of only one debtor
1. Sent against the principal – The guarantor and for the same debt, the obligation to
cannot be sued with his principal, much less answer for the same is divided among all.
alone, except in the cases mentioned in Art. 2. Cannot be availed of if there are:
2059 where the guarantor is not entitled to the a. Two or more debtors of one debt,
benefit of excussion. even if they be bound solidarily,
2. Notice to guarantor of the action – guarantor each with different guarantors; or
must be notified so that he may appear, if he so b. Two or more guarantors of the
desires, and set up defenses he may want to same debtor but for different debts
offer c. If any of the circumstances
a. Guarantor appears – voluntary enumerated in Art. 2059 should
appearance does not constitute a take place, as would the benefit
renunciation of his right to excussion. of exhaustion of the debtor’s
b. Guarantor does not appear – property.
i. He cannot set up the defenses which, 3. Extent of liability of several guarantors
by appearing are allowed to him by – joint obligation
law; and a. General rule: The obligation to
ii. It may no longer be possible for him to answer for the debt is divided
question the validity of the judgment among all of them. The
rendered against the debtor guarantors are not liable to the
iii. But he may still invoke the benefit of creditor beyond the shares which
excussion they are respectively bound to
3. Hearing before execution can be issued pay.
against the guarantor – a guarantor is entitled b. Exception: Solidarity has been
to be heard before an execution can be issued expressly stipulated.
against him where he is not a party in the case
involving his principal.
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Benefit of Division among Several Guarantors: only insofar as the payment had been
In order that the guarantor may be entitled to the beneficial to the debtor
benefit of division, it is not required that he point out 2. Payment by a third person who does not
the property of his co-guarantors. intend to be reimbursed by the debtor is
deemed to be a donation, which, however,
Reason: Obligation of the guarantor with respect to requires the debtor’s consent. But the
his co-guarantors is not subsidiary but direct and payment is in any case valid as to the
does not depend as to its origin on the solvency or creditor who has accepted it (Art. 1238)
insolvency of the latter. 3. Waiver
No benefit of division when payment is made: (Art. Guarantor’s Right to Subrogation (Art. 2067)
2073) Subrogation transfers to the person subrogated,
1. In virtue of a judicial demand the credit with all the rights thereto appertaining
2. Principal debtor is insolvent either against the debtor or against third persons, be
they guarantors or possessors of mortgages,
Right to Reimbursement: The guarantor who subject to stipulation in conventional subrogation.
pays for a debtor must be indemnified by the 1. Accrual, basis, and nature of right – right of
subrogation is necessary to enable the
latter.
guarantor to enforce the indemnity given in Art.
2066
What Comprises the Right of the Guarantor to a. Arises by operation of law upon payment by
Demand Indemnity or Reimbursement from the the guarantor
Principal Debtor (Art. 2066) (DELT) b. It is not a contractual right
1. Total amount of the debt - The guarantor c. The guarantor is subrogated, by virtue of
has no right to demand reimbursement until the payment, to the right of the creditor, not
he has actually paid the debt, unless by the those of the debtor.
terms of the contract, he is given the right 2. When right not available – since subrogation
before making payment. is the means of effectuating the right of the
2. Legal interest - It is immaterial that the debt guarantor to be reimbursed, it cannot therefore
did not earn interest for the creditor, be invoked in those cases where the
because the guarantor’s right to legal guarantor has no right to be reimbursed.
interest is granted by law by virtue of the
payment he has made, and is independent Effect of Payment by Guarantor Without Notice
of the creditor’s right to claim interest which to Debtor (Art. 2068)
was necessarily regulated by the • When the guarantor pays the creditor, but the
stipulations between him and the debtor. debtor has already paid the latter, then the
3. Expenses incurred by the guarantor - The debtor can set up against the guarantor the
expenses referred to are only those that the defense of previous extinguishments of the
guarantor has to satisfy in accordance with obligation by payment.
law as a consequence of the guaranty. • Hence, guarantor must notify the debtor before
These expenses are limited to those making payment.
incurred by the guarantor after having
notified the debtor that payment has been Reason: The guarantor cannot be allowed, through
demanded of him by the creditor. his own fault or negligence to prejudice or impair the
a. Exception: The guarantor cannot rights or interests of the debtor.
demand for reimbursement for
litigation expenses, when such NOTE: In case of an unenforceable contract, if the
expenses are due to its failure to debtor consents to the guarantor paying, the
fulfill its obligation to pay upon guarantor can seek reimbursement from the debtor.
demand. (Tuason v. Machuca, If the debtor did not consent to the guarantor paying,
G.R. No. L-22177, 1924) the guarantor cannot seek reimbursement from the
4. Damages, if they are due. guarantor.
Exceptions to Right to Indemnity or Effect of Payment by Guarantor before maturity

Reimbursement (Art. 2069)
1. Where the guaranty is constituted without Debtor’s obligation with a period – demandable
the knowledge or against the will of the only when the day fixed comes.
principal debtor, the guarantor can recover
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1. The guarantor who pays before maturity is not 7. If the principal debtor is in imminent danger
entitled to reimbursement since there is no of becoming Insolvent.
necessity for accelerating payment.
2. A contract of guaranty being subsidiary in Purpose: To enable the guarantor to take
character, the guarantor is not liable for the measures for the protection of his interest in view of
debt before it becomes due. the probability that he would be called upon to pay
Exception: The debtor will be liable if the the debt.
payment was made:
a. With his consent; or Remedy to which the Guarantor is Entitled
b. Subsequently ratified (express or implied) The guarantor cannot demand reimbursement for
by him indemnity when he has not paid the obligation.
Effect of Repeat Payment by the Debtor (Art. Remedies Available:

2070) 1. To obtain release from the guaranty; or
a) General rule: Before the guarantor pays 2. To demand security that shall protect him
the creditor, he must first notify the debtor. from:
a. If he fails to give notice and the a. Any proceedings by the creditor; and
debtor repeats payment, the b. Against the insolvency of the debtor.
guarantor’s remedy is to collect NOTE: Guarantor’s remedies are alternative. He
from the creditor has the right to choose the action to bring.
b. No cause of action against the
debtor for the return of the amount Suit by Guarantor against Creditor Before
paid by him. Payment
b) Exception: The guarantor may still claim The guarantor’s or surety’s action for release can
reimbursement from the debtor in spite of only be exercised against the principal debtor and
lack of notice if the following conditions are not against the creditor.
present:
a. The creditor becomes insolvent Reason: The creditor cannot be compelled to
b. That guarantor was prevented by release the guarantor before payment of his credit.
a fortuitous event to advise the Release of the guarantor imports an extinction of his
debtor of the payment obligation to the creditor, connoting remission or a
c. The guaranty is gratuitous novation by subrogation which requires the
creditor’s assent.
Right of Guarantor to Proceed Against Debtor
Before Payment (Art. 2071) ART. 2066 ART. 2071
General rule: Guarantor has no cause of action (RIGHT OF (RIGHT OF
against the debtor until after the former has paid the GUARANTOR TO GUARANTOR TO
obligation. REIMBURSEMENT PROCEED AGAINST
Exceptions: Art. 2071 enumerates instances when AFTER PAYMENT) DEBTOR EVEN
the guarantor may proceed against the debtor even BEFORE PAYMENT)
before the payment (ITS-PAID): Provides for the Provides for the
1. When he is Sued for the payment; enforcement of the protection before he
2. In case of Insolvency of the principal rights of the guarantor has paid but after he
debtor; against the debtor after has become liable –
3. When the debtor has bound himself to he has paid the debt – gives a protective
relieve him from the guaranty within a gives a right of action remedy before
specified period, and this Period has after payment payment
expired; Substantive right Preliminary remedy
4. When the debt has become Demandable, Remedy given seeks to
by reason of the expiration of the period for obtain from the
payment; guarantor “release
5. After the lapse of Ten (10) years, when the Gives a right of action, from the guaranty or to
principal obligation has no fixed period for which, without the demand a security that
its maturity, unless it be of such nature that provisions of the other shall protect him from
it cannot be extinguished except within a might be worthless any proceedings by the
period longer than ten years; creditor and from the
6. If there are reasonable grounds to fear that danger of insolvency of
the principal debtor intends to Abscond; the debtor.”
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Rights of the Guarantor against The Debtor

Recovery of Surety against Indemnitor (i.e., (SICS)
principal debtor) Even Before Payment 1. Indemnification
1. Indemnity agreement is for the benefit of 2. Benefit of Subrogation
surety – not for the benefit of the creditor 3. Benefit of Compromise
2. Indemnity agreement may be against actual 4. Right to obtain or demand a Security under
loss as well as potential liability – such (Art. 2071)
agreement is enforceable and not violative of
any public policy Between Co-Guarantors Right to Contribution of
a. Indemnity against loss – indemnitor will Guarantor Who Pays (Art. 2073)
not be liable until the person to be Presumption of joint liability of several
indemnified makes payment or sustains guarantors when there are:
loss 1. Two or more guarantors
b. Indemnity against liability – indemnitor’s 2. Same debtor
liability arises as soon as the liability of the 3. Same debt
person to be indemnified has arisen without
regard to whether or not he has suffered Effect: Each is bound to pay only his proportionate
actual loss share.
c. Such agreement valid - A stipulation in an Co-Guarantor has Right to Contribution When:
indemnity agreement providing that the 1. One guarantor has paid the debt to the
indemnitor shall pay the surety as soon as creditor
the latter becomes liable to make payment 2. Payment was made
to the creditor under the terms of the bond, a. In virtue of judicial demand
regardless of whether the surety has made (benefit of division has ceased); or
payment actually or not, is valid and b. Because principal debtor is
enforceable, and in accordance therewith, insolvent
the surety may demand from the indemnitor 3. Guarantor who paid is seeking
even before the creditor has paid. reimbursement from each of his co-
guarantors the share which is
Where the principal debtors are proportionately owing him.
simultaneously the same persons who
executed the indemnity agreement, the Effect: The co-guarantor who has paid may
position occupied by them is that of a demand of each of the others the share which is
principal debtor and indemnitor at the proportionally owing from him.
same, and their liability being joint and
several. Effect of Insolvency of any Guarantor
Follow the rule on solidary obligations: The
The liabilities of an insurer under the surety bond are share of the insolvent guarantor shall be borne by
not extinguished when the modifications in the the others including the paying guarantor in the
principal contract do not substantially or materially same joint proportion.
alter the principal's obligations. The surety is jointly
and severally liable with its principal when the latter Accrual and Basis of Right:
defaults from its obligations under the principal The right of reimbursement is acquired ipso jure
contract. (People's Trans-East Asia Insurance without need of any prior cession from the creditor
Corporation v. Doctors of New Millennium Holdings, by the guarantor.
Inc., G.R. No. 172404, 2014)
Defenses Available to Co-Guarantors (Art. 2074)
Guarantor of a Third Person at Request of a) General rule: All defenses which the
Another (Art. 2072) debtor would have interposed against the
The guarantor who guarantees the debt of an creditor (i.e. fraud, prescription, remission,
absentee at the request of another has a right to illegality, etc.).
claim reimbursement, after satisfying the debt from: b) Exception: Those which cannot be
1. The person who requested him to be a transmitted for being purely personal to the
guarantor; debtor.
2. The debtor
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Liability of Sub-Guarantor in case of Insolvency Release by Conveyance of Property (Art. 2077)

of Guarantor (Art. 2075) General rule: Payment is made in money.
Sub-guarantor is liable to the co-guarantors in the Exception: Any substitute paid in lieu of money
same manner as the guarantor whom he which is accepted by the creditor extinguishes the
guaranteed in case of the insolvency of the obligation and in consequence, the guaranty.
guarantor for whom he bound himself as sub- • If the creditor accepts property in payment of a
guarantor. debt from the debtor, the guarantor is relieved
from responsibility. This is also true even in
EXTINGUISHMENT OF GUARANTY case the creditor is subsequently evicted from
the property.
Causes of Extinguishment of Guaranty (PaNo-
CoCo-LoCo-FRAP) (Art. 2076) In case of eviction: Eviction revives the principal
General rule: Guaranty being accessory, it is obligation but not the guaranty.
extinguished when principal obligation is Reason: The creditor’s action against the debtor is
extinguished, the causes of which are: for eviction and this is different from what the
1. Payment or performance; guarantor guaranteed.
2. Loss of the thing due;
3. Condonation or remission of the debt; Release of Guarantor without Consent of Others
4. Confusion or merger of the rights of the (Art. 2078)
creditor and debtor; Effect: The release benefits all to the extent of the
5. Compensation; and share of the guarantor released.
6. Novation Reason: A release made by the creditor in favor of
7. Other causes: one of the guarantors without the consent of the
a. Annulment; others may prejudice the others should a guarantor
b. Rescission; become insolvent.
c. Fulfillment of a resolutory
condition; Release by Extension of Term Granted by
Creditor to Debtor (Art. 2079)
d. Prescription
Release Without Consent of Guarantor: Creditor
Exception: The guaranty itself may be directly
grants an extension of time to the debtor without the
extinguished although the principal obligation still
consent of the guarantor.
remains such as in the case of the release of the
Effect: Guarantor is discharged from his
guarantor made by the creditor.
undertaking.
Material Alteration of Principal Contract Reason: To avoid prejudice to the guarantor. The
Any agreement between the creditor and the debtor may become insolvent during the extension,
principal debtor which essentially varies the terms of thus depriving the guarantor of his right to
the principal contract without the consent of the reimbursement.
surety, will release the surety from liability. It doesn’t matter if the extension is:
a) Prejudicial or not; or
Such material alteration would constitute a novation b) For a long or short period of time.
or change of the principal contract, which is
consequently extinguished. Upon such NOTE: Consent of the Guarantor is a must.
extinguishments, the accessory contract to guaranty
is also terminated and the guarantor cannot be held Extension must be based on some new agreement
liable on the new contract to which he has not given between the creditor and the principal debtor by
his consent. virtue of which the creditor deprives him of his claim.
1. Where obligation payable in
When Alteration Material
installments: Where a guarantor is liable
Where such change will have the effect of making
for different payments.
the obligation more onerous.
a. General rule: An extension of
1. Imposes a new obligation or added
time to one or more will not affect
burden on the party promising; or
the liability of the surety for the
2. Takes away some obligation already
others.
imposed, changing the legal effect of the
b. Exception: When the unpaid
original contract and not merely the form
balance has become automatically
thereof.
due by virtue of an acceleration
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clause for failure to pay an against the debtor upon the maturity date. The
installment. surety is entitled to protect himself against the
i. Effect of exception: The act debtor’s insolvency during the extension. However,
of the creditor extending the it must be stressed that Art. 2079 will apply only if
payment of said installment, the extension is granted by the creditor in favor of
without the guarantor’s the debtor without the guarantor’s/surety’s consent.
consent, discharges the (TIDC v. APC, 2014)
guarantor.
c. Reason: The extension Release when Guarantor cannot be Subrogated
constitutes an extension of the (Art. 2080)
payment of the whole amount of • If there can be no subrogation because of the
the indebtedness fault of the creditor, the guarantors are
2. Where consent to an extension is thereby released, even if the guarantors are
waived in advance by the guarantor or solidary.
surety: Such waiver is not contrary to law, • If the creditor has acquired a lien upon the
nor to public policy property of a principal debtor, the creditor at
a. Effect: Amounts to the guarantor’s once becomes charged with the duty of
or surety’s consent to all the retaining such security, or maintaining such lien
extensions granted. in the interest of the surety, and any release or
impairment of this security as a primary
NOTE: The mere failure or neglect on the part of the resource of payment of a debt, will discharge
creditor to enforce payment or to bring an action the surety to the extent of the value of the
upon a credit, as soon as the same or any part of it property or lien released for there immediately
matures, does not constitute an extension of the arises a trust relation between the parties, and
term of the obligation, and therefore, the liability of the creditor as trustee is bound to account to the
the guarantor is not extinguished surety for the value of the security in his hands.
In order to constitute an extension discharging a
surety, it should appear that the extension was: Reason: The act of one cannot prejudice another. It
(DEW) also avoids collusion between the creditor and the
1. For a Definite period debtor or a third person.
2. Pursuant to an Enforceable agreement
between the principal and the creditor Defenses Available to Guarantor against
3. Made Without the consent of the surety or Creditor (Art. 2081)
with a reservation of rights with respect to General rule: All defenses, which pertain to the
him. principal debtor and are inherent in the debt.
• The contract must be one which precludes the Exception: Those which are purely personal to the
creditor from, or at least hinders him in, debtor.
enforcing the principal contract within the
period during which he could otherwise have D. QUASI-CONTRACTS
enforced it, and precludes the surety from
paying the debt. NEGOTIORIUM GESTIO
• The law does not even grant the surety the One who voluntarily takes charge of the
right to sue the creditor for delay, as protection agency/management of the business or property of
against the risks of possible insolvency of the another (without any power from the latter), is
debtor; but in view of the efficacy of the action obliged to continue such agency or management
on the contract against the surety, beginning until:
with the date the obligation becomes due, his 1. The termination of the affair or its incidents; or
vigilance must be exercised rather against the 2. He has required the person concerned to
principal debtor. substitute him (if the owner is in a position to
do so).
That an extension granted to the debtor by the
creditor without the consent of the guarantor However, this juridical relation does not arise in the
extinguishes the guaranty, also applies to following:
suretyship. The theory behind Art. 2079 is that an 1. When the property or business is NOT
extension of time given to the debtor by the creditor neglected or abandoned.
without the surety’s consent would deprive the 2. If the manager has been impliedly authorized
surety of his right to pay the creditor and to be by the owner.(Art. 2144)
immediately subrogated to the creditor’s remedies
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SOLUTIO INDEBITI
The principle of solutio indebiti provides that if
something is received when there is no right to
demand it, and it was unduly delivered through
mistake, the obligation to return it arises.
In such a case, a creditor-debtor relationship is
created under a quasi-contract whereby the payor
becomes the creditor who then has the right to
demand the return of payment made by mistake,
and the person who has no right to receive such
payment becomes obligated to return the same.
The principle of solutio indebiti applies where:
1. A payment is made when there exists no
binding relation between the payor, who has no
duty to pay, and the person who received the
payment;
2. The payment is made through mistake, and not
through liberality or some other cause. (Siga-
An v. Villanueva, GR 173227, 2009)
-------- end of topic --------
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X. TORTS AND DAMAGES A. TORTS
Definition
TOPIC OUTLINE UNDER THE SYLLABUS Acts that give rise to civil liability but are not
necessarily the consequences of crimes or
A. TORTS contractual obligations. (Paras, Pre-week
1. Elements Handbook in Civil Law, p. 588, 2012)
2. Culpa aquiliana v. culpa contractual v.
culpa criminal An unlawful violation of a private right, not created
3. Vicarious liability by contract, and which gives rise to an action for
4. Res ipsa loquitur damages. It is a wrongful act or omission resulting
5. Last clear chance in breach of a private legal duty, as distinguished
6. Damnum absque injuria from a mere breach of contractual duty, and damage
from said breach of duty of such a character as to
B. PROXIMATE CAUSE afford a right of redress at law in favor of the injured
party against the wrongdoer. (Aquino, Torts and
C. NEGLIGENCE Damages, p.1, 2013)
1. Standard of care
2. Presumptions
1. ELEMENTS
D. DAMAGES
1. General provisions Based on Article 2176, the following are the
2. Kinds of damages essential elements of a quasi-delict:
3. In case of death 1. Culpable act or negligence;
2. Damage to another; and
3. Causal relation between the culpable act or
negligence and the damage to another.
(Vitug, Civil Law: Volume IV, pp. 327-328,
2006)
2. CULPA AQUILIANA v. CULPA

CONTRACTUAL v. CULPA
CRIMINAL
The obligation imposed by Article 2176 of the Civil

Code on quasi-delicts is demandable not only for
one’s own acts or omissions, but also for those of
persons for whom one is responsible (Art. 2180).
A person is liable not only for his own torts, but also
for those committed by others with whom he has a
certain relationship, or for whom he is responsible.
The basis of liability is pater familias or the failure of

the persons mentioned therein to exercise due care
and vigilance over the acts of subordinates to
prevent the damage.
(Filcar Transport Services v. Espinas, G.R. No.
174156, 2012)
NOTE: Vicarious liability is not governed by the

doctrine of respondeat superior. Under the doctrine
of respondeat superior, the master is liable in every
case and unconditionally; the negligence of the
servant is conclusively presumed to be the
negligence of the master.
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However, in vicarious liability, persons are made from the other debtor may recover the
vicariously liable not because of the negligent or his corresponding entire amount he
wrongful act of the person for whom they are share in the amount paid from the actual
responsible, but because of their own negligence paid. (Art.1217) tortfeasor (Art.2182)
(i.e. liability is imposed on the employer because he
failed to exercise due diligence in the selection and Persons Vicariously Liable
supervision of his employees). The following are the persons vicariously liable:
Whenever an employee’s negligence causes a. Father/Mother for their minor

damage or injury to another, there instantly arises a children.
presumption juristantum that the employer failed to
exercise diligentissimi patris families in the selection
Reason
(culpa in eligiendo) or supervision (culpa in
The liability is a necessary consequence of the
vigilando) of its employees. To avoid liability for a
parental authority they exercise over them. The
quasi-delict committed by its employee, an
liability under Article 2180 also extends to other
employer must overcome the presumption by
persons exercising parental authority like judicially
presenting convincing proof that he exercised the
appointed guardians and adopters (AQUINO, Torts
care and diligence of a good father of a family in the
and Damages, 730-31).
selection and supervision of his employee.
(Delsan Transport v. C&A Construction, G.R. No.
Adopters
156034, 2003; Light Rail Transit Association v.
The Court does not consider that retroactive effect
Navidad, G.R. No. 145804, 2003)
may be given to the decree of adoption so as to
impose a liability under the adopting parents.
Exception (Tamago v. Court of Appeals, G.R. No. 85044,
The doctrine of respondeat superior is applicable in: 1992).
1. Liability of employers under Art. 103 of the
Revised Penal Code
2. Liability of a partnership for the tort b. Guardians are liable for the
committed by a partner. minors and incapacitated
persons under their  authority.
Primary Liability Under Article 2180
The Supreme Court held that an employee-driver Incompetent includes persons suffering the penalty
was neither an indispensable nor a necessary party of civil interdiction or who are hospitalized lepers,
in an action for damages filed against the employers prodigals, deaf and dumb who are unable to read
under Article 2176 in relation to Article 2180 to hold and write, those who are of unsound mind, even
the employer vicariously liable. Thus, it was not though they have lucid intervals, and person’s not
necessary for the court to acquire jurisdiction over being of unsound mind by reason of age, disease,
the employee-driver to hold the employers liable for weak mind and other similar causes, cannot, without
damages. outside aid, take care of themselves and manage
(Cerezo v. Tuazon, G.R. No. 141538, 2004) their property, becoming thereby an easy prey for
deceit and exploitation. (RULES OF COURT, Rule
3. VICARIOUS LIABILITY 92, Sec. 2)
Joint Tortfeasors vs. Persons Vicariously c. Schools, administrators and

Liable teachers, and individuals,
JOINT PERSONS entities or institutions engaged
TORTFEASORS VICARIOUSLY in child care having special
LIABLE
parental authority over
AS TO LIABILITY
children.
Tortfeasor (under Art.
2176) and the person
Solidarily liable Extent of Special Parental Authority
vicariously liable
(Art. 2194) It can be exercised only over minors while under
(under Art. 2180) are
their supervision, instruction or custody, including
solidarily liable.
while in authorized activities, whether inside or
AS TO AMOUNT PAID outside premises of the school, entity or institution.
The solidary debtor If the person (AQUINO, Torts and Damages, 665)
who pays the injured vicariously liable pays
party may recover the injured party, he
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Custody
The protective and supervisory custody that the Special Agent
school and its heads and teachers exercise over the A special agent is one who receives a definite and
pupils and students for as long as they are in fixed order or commission, foreign to the exercise of
attendance in school, including recess time. the duties of his office; task assigned must be
(Palisoc v. Brillantes, G.R. No. L-29025, 1971) foreign from/to his usual government functions.
o If agent is not a public official and is
As long as it can be shown that the student is in the commissioned to perform non-
school premises in pursuance of a legitimate governmental work, state is liable as
student objective, in the exercise of a legitimate ordinary employer.
right, and even in the enjoyment of a legitimate
student privilege, the responsibility of the school o If government commissions a private
authorities over the student continues. individual for a special government task, it
(Amadora v. Court of Appeals, G.R. No. L-47745, is acting through a special agent and will be
1988) liable for tort under Article 2180.
d. Owners/managers of g. Teachers/Heads of
establishment or enterprise for establishment of arts and
their employees.   trades for their pupils/
students/apprentices (Art.
They are liable for damages caused by their 2180, NCC).
employees in the service of the branches in which
they are employed, or on the occasion of their 4. RES IPSA LOQUITUR
functions. It does not extend to acts of strangers
who committed unauthorized acts and in doing so, Definition
caused damage to others. (Art. 2180, par. 4) Where the thing which causes injury is shown to be
under the management of the defendant, and the
Managers accident is such as in the ordinary course of things
In Article 2180, “managers” is used in the sense of does not happen if those who have the
an employer. A managerial employee within the management use proper care, it affords reasonable
contemplation of the Labor Code is not a manager evidence, in the absence of an explanation by the
under Article 2180 because he himself may be defendant, that the accident arose from want of
regarded as an employee or dependiente of the care.
employer. (Layugan v. IAC, G.R. 73998, 1998)
(Philippine Rabbit Bus Lines, Inc. v. Phil. American
Forwarders, Inc., G.R. No. L-25142, 1975) Elements of Res Ipsa Loquitur
1. The accident was of a kind which does not
NOTE: Co-employees are not liable even if they ordinarily occur unless someone is
supervise the employee. negligent;
2. The instrumentality or agency which
e. Employers for their employees caused the injury was under the exclusive
and household helpers.   control of the person charged with
negligence;
Although the employer is not the actual tortfeasor, 3. Injury suffered must have not been due to
the law makes him vicariously liable on the basis of any voluntary action or contribution on the
the civil law principle of pater familias for failure to person injured
exercise due care and vigilance over the acts of (D.M. Consunji v. Court of Appeals, G.R.
one’s subordinates to prevent damage to another. No. 137873, 2001);
(Filcar Transport Service v. Espinas, supra) 4. It must appear that the injured party had no
knowledge or means of knowledge as to
the cause of the accident, or that the party
f. State for their special agents.
to be charged with negligence has superior
 
knowledge or opportunity for explanation of
It is a basic constitutional rule that the State cannot the accident.
be sued without its consent. Consent of the State to (Malayan Insurance Co. vs. Rodelio Alberto
be sued can be manifested through a special law or and Enrico Reyes, G.R. No. 194320)
general law allowing the State to be sued.
(AQUINO, Torts and Damages, 718)
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The doctrine of res ipsa loquitur finds no application Elements of a malpractice claim based on the
if there is direct proof of absence or presence of doctrine of informed consent
negligence. If there is sufficient proof showing the 1. The physician had a duty to disclose
conditions and circumstances under which the injury material risks;
occurred, then the creative reason for the said 2. He failed to disclose or inadequately
doctrine disappears. (Huang v. Philippine Hoteliers disclosed those risks;
Inc., G.R. No. 180440, 2012) 3. As a direct and proximate result of the
failure to disclose, the patient consented to
Medical Malpractice; Doctrine of Common the treatment, which he or she would
Knowledge otherwise not have consented to; and
The general rule on the necessity of expert 4. The patient was injured by the proposed
testimony applies only to such matters clearly within treatment.
the domain of medical science, and not to matters (Li v. Soliman, G.R. No. 165279, 2011)
of common knowledge. Ordinarily, only experienced
physicians and surgeons are competent to testify on 5. LAST CLEAR CHANCE
whether a patient has been treated with reasonable
care. However, where common knowledge and Also known as the “Doctrine of Discovered Peril.”
experience teach that a resulting injury would not
have occurred if due care had been exercised (e.g. Even though a person’s own acts may have placed
leaving gauzes inside the body of the patient after him in a position of peril and an injury results, the
an operation, operating on the wrong part of the injured is entitled to recover if the defendant through
body, etc.), an inference of negligence may be the exercise of reasonable care and prudence might
drawn giving rise to an application of the doctrine of have avoided injurious consequences to the
res ipsa loquitur without medical evidence. plaintiff.
(Ramos v. Court of Appeals, G.R. No. 124354,
1999) Requisites
1. Plaintiff was in a position of danger by his
Standard of Care required from the Medical own negligence;
Profession 2. Defendant knew of such position of the
Given these safeguards, there is no need to plaintiff;
expressly require of doctors the observance of 3. Defendant had the last clear chance to
“extraordinary” diligence. As it is now, the practice avoid the accident by exercise of ordinary
of medicine is already conditioned upon the highest care but failed to exercise such last clear
degree of diligence. The standard contemplated for chance and;
doctors is simply the reasonable average merit 4. Accident occurred as proximate cause of
among ordinarily good physicians. That is such failure.
reasonable diligence for doctors or, the reasonable
skill and competence that a physician in the same Who may invoke:
or similar locality should apply. Plaintiff
Liability of Hospital in Cases of Medical When the doctrine is not applicable
Negligence 1. Joint Tortfeasors;
The Court has applied the doctrine of agency by 2. Defendants concurrently negligent;
estoppel to hold hospitals liable for the negligent 3. As against third persons; and
acts of physicians based on: 4. Contractual breach.
1. The patient accepts the services of the
physician; and
6. DAMNUM ABSQUE INJURIA
2. The patient believes that the physicians are
agents of the hospital.
There can be damage without injury in those
Doctrine of Informed Consent instances in which the loss or harm was not the
The doctrine of informed consent requires a doctor result of a violation of a legal duty. In such cases,
to inform his patient of the material risks associated the consequences must be borne by the injured
with a medical procedure. person alone, the law affords no remedy for
damages resulting from an act which does not
amount to a legal injury or wrong. These situations
are often called damnum absque injuria.
(BPI Express Card Corporation v. Court of Appeals,
G.R. No. 120639)
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But note that in the case of Bataclan v. Medina, the

Damage v. Damages v. Injury court used the doctrine of proximate cause in the
There is a material distinction among damage, case of breach of contract of carriage but only to
damages and injury. Injury is the illegal invasion of determine the extent of liability.
a legal right; damage is the loss, hurt or harm which Bataclan v. Medina (G.R. No. L-10126, 1957)
results from the injury; and damages are the
recompense or compensation awarded for the Necessary Link
damage suffered. The necessary link or the causal relation between
(Custodio v. Court of Appeals, G.R. No. 116100, the proximate cause and the injury must be directly
1996) shown and established to overcome the burden of
proof required, and to determine liability.
When Not Applicable
The principle of damnum absque injuria does not NOTE: If plaintiff's negligence is only contributory,
apply when there is an abuse of a person’s right. he is considered partly responsible only. Plaintiff
(Cebu Country Club, Inc., v. Elizagaque, G.R. No. may still recover from the defendant but the award
160273, 2008) of damages may be reduced by the courts in
proportion to his own negligence.
Mistakes by public officers are not actionable in the (Bank of America NT & SA vs. Philippine Racing
absence of malice or gross negligence amounting to Club, G.R. No. 150228, 2009)
bad faith.
(Farolan v. Solmac Marketing Corporation, G.R. No. Efficient Intervening Cause
83589) An independent intervening cause as one which is
so distinct as to sever the connection of cause and
B. PROXIMATE CAUSE effect between the negligent act and the injury.
(Bartels v. City of Williston, 629 F.2d 509, 1980)
Definition
That cause which, in natural and continuous An intervening cause, to be considered efficient,
sequence, unbroken by any efficient intervening must be one not produced by a wrongful act or
cause, produces the injury, and without which the omission, but independent of it, and adequate to
result would not have occurred. bring the injurious results.
(Vda. de Bataclan v. Medina, G.R. No. L-10126,
1957) Any cause intervening between the first wrongful
cause and the final injury which might reasonably
The proximate cause of the injury is not necessarily have been foreseen or anticipated by the original
the immediate cause of, or the cause nearest in time wrongdoer is not such an efficient intervening cause
to, the injury. It is only when the causes are as will relieve the original wrong of its character as
independent of each other that the nearest is to be the proximate cause of the final injury.
charged with the disaster. So long as there is a (Abrogar v. Cosmos Bottling Co., G.R. No. 164749,
natural, direct and continuous sequence between March 15, 2017)
the negligent act and the injury that it can
reasonably be said that but for the act the injury If an independent cause intervenes, which is of itself
could not have occurred, such negligent act is the sufficient to produce the result, it is regarded as
proximate cause of the injury, and whoever is proximate cause, and the originator of the first cause
responsible therefore is liable for damages resulting is relieved from liability.
therefrom. (Michael v. U.S., 338 F.2d 219, 1964)
(Brinas v. People of the Philippines, G.R. L-30309,
1983) Immediate Cause
The cause nearest in time to the injury.
Proximate Cause Inapplicable in Breach of
Contract Intervening Cause
Such doctrine only applies in actions for quasi- If the intervening cause is one which in ordinary
delicts, not in breach of contract. It is a device for human experience is reasonably to be anticipated
imputing liability to a person where there is no or one which the defendant has reason to anticipate
relation between him and another party. under the particular circumstances, the defendant
(Sps. Guanio v. Makati Shangri-La Hotel, G.R. No. may be negligent among other reasons, because of
190601, 2011) failure to guard against it; or the defendant may be
negligent only for that reason.
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One who sets a fire may be required to foresee that Legal Cause/Proximate Cause; Test of
an ordinary, usual and customary wind arising later Foreseeability
will spread it beyond the defendant's own property, Where the particular harm was reasonably
and therefore to take precautions to prevent that foreseeable at the time of the defendant’s
event. The person who leaves the combustible or misconduct, his act or omission is the legal cause
explosive material exposed in a public place may thereof. Foreseeability is the fundamental test of the
foresee the risk of fire from some independent law of negligence. To be negligent, the defendant
source. In all of these cases there is an intervening must have acted or failed to act in such a way that
cause combining with the defendant's conduct to an ordinary reasonable man would have realized
produce the result and in each case the defendant's that certain interests of certain persons were
negligence consists in failure to protect the plaintiff unreasonably subjected to a general but definite
against that very risk. class of risk which made the actor’s conduct
(Phoenix Construction v. IAC, G.R. No. L-65295, negligent, it is obviously the consequence for the
1987). actor must be held legally responsible. Otherwise,
the legal duty is entirely defeated. Accordingly, the
A prior and remote cause cannot be made the basis generalization may be formulated that all particular
of an action if such remote cause did nothing more consequences, that is, consequences which occur
than furnish the condition or give rise to the occasion in a manner which was reasonably foreseeable by
by which the injury was made possible, if there the defendant at the time of his misconduct are
intervened between such prior or remote cause and legally caused by his breach of duty.
the injury a distinct, successive, unrelated, and (Achevara v. Ramos, G.R. No. 175172, 2009)
efficient cause of the injury, even though such injury
would not have happened but for such condition or Emergency Rule Doctrine
occasion. If no danger existed in the condition Under the emergency rule, one who suddenly finds
except because of the independent cause, such himself is a place of danger and is required to act
condition was not the proximate cause. And if an without time to consider the best means that may be
independent negligent act or defective condition adopted to avoid the impending danger is not guilty
sets into operation the instances, which result in of negligence even if fails to adopt what
injury because of the prior defective condition, such subsequently and upon reflection may appear to
subsequent act or condition is the proximate cause. have been a better method unless the emergency,
(Manila Electric Co. v. Remoquillo, G.R. No. L-8328, he finds himself in is brought by his own negligence.
1956). (Gan v. Court of Appeals G.R. No. L-44264, 1988)
Remote Cause Elements

That cause which some independent force merely The emergency rule or sudden peril doctrine can be
took advantage of to accomplish something not the broken down into elements namely:
natural effect thereof. It cannot be considered the i. Defendant found himself in a place of
legal or proximate cause of the damage. (Aquino, danger;
Torts and Damages, p. 318, 2013) ii. Defendant had no time to consider the best
means to avoid such danger; and
Concurrent Cause iii. Defendant was not negligent.
Where several causes producing an injury are
concurrent and each is an efficient cause without Case Law Has Discredited the Distinction
which the injury would not have happened, the injury Between Cause and Condition
may be attributed to all or any of the causes and The distinction between cause and condition has
recovery may be had against any or all of the now been entirely discredited.
responsible persons although under the
circumstances of the case, it may appear that one In Phoenix Construction v. IAC, the Court ruled:
of them was more culpable, and that the duty owed Many courts have sought to distinguish between the
by them to the injured person was not the same. No active "cause" of the harm and the existing
actor's negligence ceases to be a proximate cause "conditions" upon which that cause operated. If the
merely because it does not exceed the negligence defendant has created only a passive static
of other actors. Each wrongdoer is responsible for condition, which made the damage possible, the
the entire result and is liable as though his acts were defendant is said not to be liable. But so far as the
the sole cause of the injury. fact of causation is concerned, in the sense of
(Ruks Konsult and Construction v. Adworld Sign necessary antecedents which have played an
and Advertising Corp., G.R. No. 204886, 2015) important part in producing the result it is quite
impossible to distinguish between active forces and
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passive situations, particularly since, as is invariably a good father of a family, unless the law or the
the case, the latter are the result of other active stipulation of the parties requires another standard
forces which have gone before. of care. (Art. 1163)
The defendant who spills gasoline about the Diligence of a “good father of a family"
premises creates a "condition," but the act may be It is the standard of diligence expected of, among
culpable because of the danger of fire. When a others, usufructuaries, passengers of common
spark ignites the gasoline, the condition has done carriers, agents, depositaries, pledgees, officious
quite as much to bring about the fire as the spark; managers, and persons deemed by law as
and since that is the very risk, which the defendant responsible for the acts of others. It requires only
has created, the defendant will not escape that diligence which an ordinary prudent man would
responsibility. Even the lapse of a considerable time exercise with regard to his own property.
during which the "condition" remains static will not (Philippine National Bank v. Santos, G.R. No.
necessarily affect liability; one who digs a trench in 208293 & 208295)
the highway may still be liable to another who fans
into it a month afterward. 1. STANDARD OF CARE
"Cause" and "condition" still find occasional mention If the law or contract does not state the diligence
in the decisions; but the distinction is now almost which is to be observed in the performance, that
entirely discredited. So far as it has any validity at which is expected of a good father of a family shall
all, it must refer to the type of case where the forces be required. (Art. 1173)
set in operation by the defendant have come to rest
in a position of apparent safety, and some new force Intoxication
intervenes. But even in such cases, it is not the Mere intoxication is not negligence, nor does the
distinction between "cause" and "condition" which is mere fact of intoxication establish a want of ordinary
important but the nature of the risk and the character care. It is but a circumstance to be considered with
of the intervening cause. the other evidence tending to prove negligence.
(Phoenix Construction v. IAC, G.R. L-65295, 1987) (Wright v. Manila Electric R.R. & Light Co., G.R. No.
7760)  
C. NEGLIGENCE
Lawyers
Concept A lawyer is not bound to exercise extraordinary
The omission of that degree of diligence which is diligence, but only a reasonable degree of care and
required by the nature of the obligation and skill, having reference to the character of the
corresponds to the circumstances of the persons, business he undertakes to do.
time and place. (Art. 1173) (Adarne v. Aldaba, A.C. No. 801) 
The test by which to determine the existence of Physicians

negligence in a particular case may be stated as The physician’s duty to his patient relates to his
follows: Did the defendant, in doing the alleged exercise of the degree of care, skill and diligence
negligent act, use that reasonable care and caution which physicians in the same general
which an ordinarily prudent person would have used neighborhood, and in the same general line of
in the same situation? If not, then he is guilty of practice, ordinarily possess and exercise in like
negligence. cases.
(Picart v. Smith, 37 Phil. 809)
Banks
Negligence has been defined as “the failure to Similar to common carriers, banking is a business
observe for the protection of the interests of another that is impressed with public interest. Hence, the
person that degree of care, precaution, and Court has recognized the fiduciary nature of banks’
vigilance which the circumstances justly demand, functions and attached a special standard of
whereby such other person suffers injury." diligence for the exercise of their functions.  
(Cusi v. Philippine National Railways, G.R. No. L-
29889)
One who is blind
One who is physically disabled is required to use the
Good father of a family or reasonably prudent
same degree of care that a reasonably careful
person person who has the same physical disability would
Every person obliged to give something is also use. Physical handicaps and infirmities, such as
obliged to take care of it with the proper diligence of blindness or deafness, are treated as part of the
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circumstances under which a reasonable person D. DAMAGES

must act. Thus, the standard of conduct for a blind
person becomes that of a reasonable person who is 1. GENERAL PROVISIONS
blind.
(Francisco v. Chemical Bulk Carriers, Incorporated, Concept
G.R. No. 193577) Adequate compensation for the value of loss
suffered or profits which obligee failed to obtain.
In possession of dangerous instrumentalities
A higher degree of care is required of someone who Exceptions
has in his possession or under his control an 1. Law; and
instrumentality extremely dangerous in character, 2. Stipulation.
such as dangerous weapons or substances.  
(Pacis v. Morales, G.R. No. 169467) Actual damages shall be construed to include all
damages that the plaintiff may show he has suffered
Emergency in respect to his property, business, trade,
One who suddenly finds himself in a place of danger profession, or occupation, and no other damages
and is required to act without time to consider the whatsoever. Actual damages are compensatory
best means that may be adopted to avoid the only. They simply make good or replace the loss
impending danger, is not guilty of negligence, if he caused by the wrong.
fails to adopt what subsequently and upon reflection (Algarra v. Sandejas, G.R. No. L-8385, 1914.).
may appear to have been a better method, unless
the emergency in which he finds himself is brought Indemnification is meant to compensate for the
about by his own negligence. injury inflicted and not to impose a penalty. A party
(Gan v. Court of Appeals, G.R. No. L-44264, 1988) is entitled to adequate compensation only for such
pecuniary loss actually suffered and duly proved.
An individual will nevertheless be subject to liability (PNOC Shipping and Transport Corp v. CA, G.R.
if the emergency was brought about by his own No. 107518, 1998)
negligence.
(Valenzuela v. CA, G.R. Nos. 115024 & 117944, 2. KINDS OF DAMAGES
1996)
NOTE: Applicable only to situations that are sudden a. Actual Damages

and unexpected such as to deprive the actor of all
opportunity for deliberation (absence of Classes (I-LAV-IIT)
foreseeability); the action shall still be judged by the 1. Indemnity for death;
standard of the ordinary prudent man. 2. Lucrum Cesans (Benefits you would have
obtained;
2. PRESUMPTIONS 3. Attorney’s fees;
4. Value of loss actually sustained (damnum
emergens);
General Rule
5. Interest;
The burden of proof in each action based on quasi-
6. Injury to business standing or commercial
delict rests on the plaintiff.
credit; and
7. Temporary or permanent loss of earning
Exception
capacity.
There are certain exceptions when the plaintiff need
not prove the existence of negligence as an element
Kinds of Actual or Compensatory Damages
of quasi-delict i.e. res ipsa loquitur, injury caused by
i. General Damage
dangerous weapons and substances, violation of
Natural, necessary and logical
traffic rules and regulations, strict liability torts.
consequences of a particular wrongful act
which result in injury; need not be
NOTE: However, the party invoking such
specifically pleaded because the law itself
presumption must still establish certain
implies or presumes that they resulted from
preconditions before the presumption can operate.
the wrongful act
For instance, Article 2185 requires proof that there
was a violation of a traffic regulation while Article
2188 requires proof of possession of dangerous
weapons or substances, such as firearms and
poison. (Aquino, Torts and Damages, p. 137, 2005)
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ii. Special Damages 5. Award of civil indemnity in tort cases or

Damages which are the natural, but not the criminal cases where the victim died. This
necessary and inevitable result of the civil indemnity is in addition to any actual or
wrongful act. (i.e., attorney’s fees) compensatory damages that may be
awarded in favor of the victim’s heirs.
Requisites
1. Alleged and Proved with Certainty Value of Loss
a. Must be pleaded and proved with Means the unrealized profit.
certainty; and
b. Must pray for the relief that claim for Value of Loss Suffered
loss be granted. Destruction of things, fines or penalties, medical &
hospital bills, attorney's fees, interests, cost of
2. Not Speculative litigation.
Plaintiff must prove the loss. For damages
to be recovered, the best evidence Loss of Earning Capacity; Variables to
obtainable by the injured party must be Consider
presented. Actual or compensatory
damages cannot be presumed but must be 1. Life expectancy:
proved with reasonable degree of certainty. Formula: [2/3 x( 80 – (age at the time of death))]
The Court cannot rely on speculation, The resulting amount should be used as a
conjecture or guesswork as to the fact and multiplier even if the computed life expectancy
amount of damages, but must depend upon goes beyond the victim’s retirement age. The
competent proof that they have been presumption is that the victim could have
suffered and on evidence of the actual earned income even if he is beyond the
amount. If the proof is flimsy and retirement age.
unsubstantial, no damages will be (Smith Bell Dodwell Shipping Agency
awarded. Corporation v. Borja, G.R. No. 143008, 2002)
(Consolidated Industrial Gases, Inc. vs.
Alabang Medical Center, G.R. No. 181983, 2. Net income/earnings: total of the earnings less
2013) expenses necessary for the creation of such
earnings and less living or other incidental
The claimant has the burden of proof. He must expenses.
establish his case by a preponderance of evidence
which means that evidence, as a whole, adduced by 3. Living expenses: In the absence of the
one side is superior to that of the other. It is not specific amount to be deducted from the gross
enough that the plaintiff presents an estimated income, the amount of living expenses shall be
amount. But uncertainty as to the precise amount is 50% of the gross income. Examples of living
not necessarily fatal. Mere difficulty in the expenses: transportation, clothing, toiletries.
assessment of damages is not sufficient reason for
refusing to award damages where the right to them 4. Non-working victims: Earning capacity may
has been established. be impaired even if no actual earning is lost in
(PNOC Shipping and Transport Corp v. CA, G.R. the meantime. The liability under Article 2206 is
No. 107518, 1998). for loss of earning capacity rather than loss of
actual earnings. The minimum wage can be
When Loss Need Not Be Proved used in computing the net earnings.
1. Liquidated damages previously agreed
upon; liquidated damages take the place of 5. Pension: Loss of earning capacity covers
actual damages except when additional pension which the decedent would have
damages are incurred; received.
2. If damages other than actual are sought; (De Caliston v. CA, G.R. No. L-63135, 1983).
3. Loss is presumed (ex: loss if a child or
spouse);
4. Forfeiture of bonds in favor of the
government for the purpose of promoting
public interest or policy (ex: bond for
temporary stay of alien); and
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Formula for Computation of Loss of Earning college at the age of 21, and it is only then
Capacity that they would start earning a livelihood;
American Expectancy Table of Mortality or the 2. “Net Annual Income '' may be computed
Actuarial of Combined Experience Table of on the basis of the prevailing minimum
Mortality: wage for workers in the non-agricultural
sector at the time of the minor’s death or
[2/3 x (80 – (age at the time of death))] x permanent incapacity.
monthly earnings x 12 = GROSS (Spouses Pereña v. Spouses Zarate, 2012;
EARNINGS (GE) and Abrogar v. Cosmos Bottling Co., 2017)
GE – Approximate Expenses General Rule

(50% of GE) = Net Earnings Documentary evidence should be presented to
substantiate the claim for damages for loss of
NOTE: In the absence of documentary evidence of earning capacity.
expenses, it is reasonable to presume that it is 50%
of the gross income. Exceptions
(Philippine Hawk Corporation v. Lee, G.R. No. Damages for loss [or impairment] of earning
166869, 2010) capacity may be awarded despite the absence of
documentary evidence when (1) the deceased [or
LEC May Be Awarded to Parents of Deceased the injured] was self-employed and earning less
Child Who Had NO History of Earnings than the minimum wage under current labor laws, in
Art. 2206(1) provides that damages for LEC shall be which case, judicial notice may be taken of the fact
assessed and awarded by the court “unless the that in the deceased’s line of work no documentary
deceased on account of permanent physical evidence is available; or (2) the deceased was
disability not caused by the defendant, had no employed as a daily worker earning less than the
earning capacity at the time of his death”. Damages minimum wage under current labor laws.
for LEC may be awarded to a minor’s heirs although
he had no history of earnings because Loss of Profits (Lucrum Cessans)
compensation of this nature is awarded not for loss May be determined by considering the average
of time or earnings but for loss of the deceased’s profit for the preceding years multiplied by the
power or ability to earn money. number of years during which the business was
(Spouses Pereña v. Spouses Zarate, G.R. No. affected by the wrongful act or breach
157917, August 29, 2012)
The income of similar businesses or activities may
How to Compute LEC of Non-Earning Student be considered.
As a general rule, damages for LEC are computed (G.A. Machineries, Inc. v. Yaptinchay, G.R. No. L-
by applying the following formula: 30965, 1983)
Damage to Business Standing/ Commercial

Damages for LEC = 2/3(80-X) multiplied Credit
by Net Annual Income In Radio Communications v. CA, compensatory
damages were also awarded for injury to
respondent's "business reputation or business
o X – the deceased or permanently
standing", "loss of goodwill and loss of customers or
incapacitated person’s age at the time of
shippers who shifted their patronage to
the accident; and
competitors". The grant thereof is proper under the
o Net Annual Income – equivalent to a
provisions of Article 2205, which provides that
person’s Gross Annual Income less
damages may be recovered "for injury to the
Necessary and Living Expenses (in the
plaintiff's business standing or commercial credit."
absence of evidence, it is presumed that
And even if not recoverable compensatory
Necessary and Living Expenses are equal
damages, they may still be awarded in the concept
to half of a person’s Gross Annual Income).
of temperate or moderate damages.
The Formula May Be Modified When a Minor
There are cases where from the nature of the case,
Who Was Not Yet Earning is Involved:
definite proof of pecuniary loss cannot be offered,
1. “X” may be fixed at 21, instead of the
although the court is convinced that there has been
person’s age at the time of his death or
such loss. For instance, injury to one's commercial
permanent incapacity. Courts may
credit or to the goodwill of the business firm is often
presume that persons graduate from
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hard to show with certainty in terms of money. The persons or to incur expenses to protect his
judge should be empowered to calculate moderate interest;
damages in such cases, rather than that the plaintiff 3. In criminal cases of malicious prosecution
should suffer, without redress from the defendant's against the plaintiff;
wrongful act. 4. In case of a clearly unfounded civil action or
(Radio Communications of the Philippines, Inc. v. proceeding against the plaintiff;
Court of Appeals, G.R. No. L-55194, 1981) 5. Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
Attorney’s Fees plaintiff's plainly valid, just and demandable
They are actual damages due to the plaintiff and not claim;
to counsel. 6. In actions for legal support;
7. In actions for the recovery of wages of
Plaintiff must allege the basis of his claim for household helpers, laborers and skilled
attorney’s fees in the complaint. The basis should workers;
be one of the cases under Art. 2208. 8. In actions for indemnity under workmen's
compensation and employer's liability laws;
In its ordinary concept, an attorney’s fee is the 9. In a separate civil action to recover civil liability
reasonable compensation paid to a lawyer by his arising from a crime;
client for the legal services he has rendered to the 10. When at least double judicial costs are
latter. The basis of this compensation is the fact of awarded. (Art. 2208)
his employment by and his agreement with the
client. Interest
Two types of interest:
In its extraordinary concept, an attorney’s fee is an 1. Monetary Interest; and
indemnity for damages ordered by the court to be 2. Compensatory Interest.
paid by the losing party in litigation. The basis of this
is any of the cases provided by law where such Monetary Interest
award can be made, such as those authorized in Compensation for the use of money.
Article 2208, Civil Code, and is payable not to the
lawyer but to the client, unless they have agreed that NOTE: The legal rate at the time of perfection of the
the award shall pertain to the lawyer as additional obligation will apply. It will not be affected by a
compensation or as part thereof. supervening change in the legal rate of interest.
Attorney's fees are recoverable not as a matter of Requisites

right. It is the import of Article 2208 that the award The collection of interest in loans or forbearance of
of attorney's fees is an exception and that the money is allowed only when these two conditions
decision must contain an express finding of fact to concur:
bring the case within the exception and justify the 1. There was an express stipulation for the
grant of attorney's fees. "Just and equitable" under payment of interest; and
paragraph 11, Article 2208, New Civil Code is not a 2. The agreement for the payment of the
matter of feelings, but demonstration. The reason interest was reduced in writing.
for the award of attorney's fees must be stated in the
text of the court's decision, otherwise, if it is stated Absent any of these two conditions, the money
only in the dispositive portion of the decision, the debtor cannot be made liable for interest. Evidence
same must be disallowed on appeal. must be presented to show that the parties agreed
(Abrogar v. IAC, G.R. No. L-67970 January 15, on the payment of interest.
1988)
BUT SEE: S.C. Megaworld v. Parada (G.R. No.
When Attorney’s Fees are Recoverable; 183804, 2013) and Raymundo v. Galen Realty
General Rule (G.R. No. 191594, 2013) where the Court awarded
In the absence of stipulation, attorney's fees and interest despite the absence of stipulation.
expenses of litigation, other than judicial costs,
cannot be recovered. Compensatory interest
It is awarded in the concept of damages for delay in
Exceptions: the performance of an obligation. It is due and
1. When exemplary damages are awarded; demandable from the time demand is first made,
2. When the defendant's act or omission has whether judicial or extrajudicial.
compelled the plaintiff to litigate with third
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NOTE: For compensatory interest, the legal rate of ng Pilipinas, pursuant to Articles 2210 and
interest always applies. This means that 2011 of the Civil Code, which is 6%.
compensatory interest is affected by supervening
changes in legal rate of interest. (d) No interest, however, shall be adjudged on
unliquidated claims or damages until the
Rules in the Computation of Interest in the demand can be established with
Concept of Actual or Compensatory Damage reasonable certainty. Accordingly, where the
amount of the claim or damages is established
(a) In case of loan or forbearance of money, with reasonable certainty, the prevailing legal
goods, credits or judgments, the interest due interest shall begin to run from the time the
should be that which is stipulated by the parties claim is made extrajudicially or judicially (Art.
in writing, provided that it is not excessive and 1169) until full payment, but when such
unconscionable. which may have been certainty cannot be so reasonably established
stipulated in writing: at the time the demand is made, the interest
1. In the absence of a stipulated reckoning shall begin to run only from the date of the
date, the interest shall be computed from judgment of the trial court (at which time the
default, i.e., from extrajudicial or judicial quantification of damages may be deemed to
demand in accordance with Article 1169 of have been reasonably ascertained) until full
the Civil Code, UNTIL FULL PAYMENT, payment.
without compounding any interest. o The actual base for the computation of the
o Unless compounded interest is interest shall, in any case, be on the
expressly stipulated by the parties, principal amount finally adjudged, without
by law or regulation. compounding any interest unless
2. Interest due on the principal amount compounded interest is expressly
accruing as of judicial demand shall stipulated by law or regulation.
separately earn legal interest at the (Lara’s Gifts & Decors, Inc. v. Midtown
prevailing rate prescribed by the Bangko industrial Sales, Inc., G.R. No. 225433,
Sentral ng Pilipinas, from the time of judicial 2019).
demand until full payment.
NOTE: C.B. Circular No. 799, July 1, 2013, changed
(b) Obligation other than a loan or forbearance the rate of interest in the absence of stipulation in
of money, goods, credits or judgments loans or forbearance of money to 6%.
1. The rate of interest on the principal amount
shall be the prevailing legal interest When Actual Damages are Mitigated
prescribed by the Bangko Sentral ng 1. Contributory negligence;
Pilipinas. 2. In contracts, quasi-contracts, and quasi-delict;
2. It shall be computed from extrajudicial or (a) Plaintiff has contravened the terms of
judicial demand in accordance with Article contract;
1169 of the Civil Code, UNTIL FULL (b) Plaintiff derived some benefit as result of
PAYMENT, without compounding any contract;
interest. (c) In case where exemplary damages are to
o Unless compounded interest is be awarded, that the defendant acted
expressly stipulated by the parties, upon the advice of counsel;
by law or regulation. (d) That the loss would have resulted in any
3. Interest due on the principal amount event; and
accruing as of judicial demand shall (e) That since the filing of the action, the
separately earn legal interest at the defendant has done his best to lessen the
prevailing rate prescribed by the Bangko plaintiff's loss or injury.
Sentral ng Pilipinas, from the time of judicial
demand until full payment. General Rule
Insofar as actual or compensatory damages are
(c) When the obligation, not constituting a loan concerned, Article 2199 provides, “Except as
or forbearance of money, goods, credits or provided by law or by stipulation, one is entitled to
judgments, is breached, an interest on the an adequate compensation only for such pecuniary
amount of damages awarded may be imposed loss suffered by him as he has duly proved. Such
in the discretion of the court at the prevailing compensation is referred to as actual or
legal interest prescribed by the Bangko Sentral compensatory damages.”
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“Conformably with the foregoing provision, the rule 1. Damages in Case of Good Faith
is long and well settled that there must be pleading (a) Natural and probable consequences of
and proof of actual damages suffered for the breach of obligations; and
same to be recovered. (b) Parties have foreseen or could have
reasonably foreseen at the time the
In addition to the fact that the amount of loss must obligation was created.
be capable of proof, it must also be actually proven
with a reasonable degree of certainty, premised 2. Damages in Case of Bad Faith
upon competent proof or the best evidence It is sufficient that damages may be reasonably
obtainable. attributed to the non-performance of the
obligation.
The burden of proof of the damage suffered is,
consequently, imposed on the party claiming the Two Kinds of Foreseeability
same who should adduce the best evidence 1. Imputed Foreseeability
available in support thereof, like sales and delivery Those consequences which a reasonable
receipts, cash and check vouchers and other pieces person should have foreseen; the test is
of documentary evidence of the same nature. In the whether a reasonable person would have
absence of corroborative evidence, it has been held foreseen the damages that the purchaser
that self-serving statements of account are not encountered.
sufficient basis for an award of actual damages. (Hadley v. Baxendale, cited in Daywalt v. La
Corporacion, G.R. No. L-13505, 1919).
Corollary to the principle that a claim for actual
damages cannot be predicated on flimsy, remote, 2. Actual Foreseeability
speculative, and insubstantial proof, courts are, Actual knowledge (not just imputed) of relevant
likewise, required to state the factual bases of the facts is necessary where the loss in question is
award. of an unusual kind or of an unusually high
(Oceaneering Contractors (Phils.), Inc. v. Barreto, extent.
G.R. No. 184215, 2011)
In Mendoza v. PAL, the defendant cannot be
Exceptions held liable for damages where it could not have
1. It should be emphasized however that foreseen the damages that would be suffered
uncertainty as to the precise amount is not by the plaintiff upon failure to deliver the can of
necessarily fatal. film for reason that the plans of the plaintiff to
(Talisay-Silay Milling, Inc. v. Associacion de exhibit that film during the town fiesta and his
Agricultores de Talisay-Silay, Inc., G.R. No. preparation, specially the announcement of
91852,1995); said exhibition by poster and advertisement in
the newspapers were not called to the
2. Mere difficulty in the assessment of damages is defendant's attention.
not sufficient reason for refusing to award
damages where the right to them has been Unusual or extraordinary damages (beyond
established. the ordinary course of things) must have been
(Ball v. Pardy CTJ Construction Co., 63 ALR brought within the contemplation of the parties
139, 108 Conn. 549, 143 A 855); as the probable result of breach at the time of
or prior to contracting. (Mendoza v. PAL, G.R.
3. Proof of Actual loss is also not necessary in No. L-3678, 1952)
cases where the law or jurisprudence allows the
award of civil indemnity. As in People v. Extent or Scope of Actual Damages; In Crimes
Guanzon, the Court ruled that: Civil indemnity, and Quasi-Delicts
which is actually in the nature of actual or 1. Defendant is liable for all damages that are
compensatory damages, is mandatory upon the natural and probable consequences of the
finding of the fact of rape. act complained of; and
(People v. Alex Condez y Guanzon, G.R. No. 2. Not necessary that damages have been
187077, 2011) foreseen or could have been reasonably
foreseen.
Extent or Scope of Actual Damages; In
Contracts and Quasi-Contracts
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b. Moral Damages In culpa aquiliana,

1. when the act or omission causes physical
Concept injuries; or
Includes (PBMF-MWSSS) 2. when the defendant is guilty of intentional
1. Physical suffering tort (in this latter case, moral damages may
2. Besmirched reputation be recovered even in loss of or damage to
3. Mental anguish property).
4. Fright
5. Moral shock In culpa criminal, when the accused is guilty of
6. Wounded feelings physical injuries, lascivious acts, adultery or
7. Social humiliation concubinage, illegal or arbitrary detention, illegal
8. Serious anxiety arrest, illegal search, defamation and malicious
9. Sentimental value of real or personal property prosecution.
may be considered in adjudicating moral (Expertravel & Tours, Inc. v. CA, G.R. No. 130030,
damages. (Art. 2217) June 25, 1999)
The social and economic/financial standing of the Who May Recover Moral Damages
offender and the offended party should be taken into 1. The parents of the female seduced, abducted,
consideration in the computation of moral damages. raped, or abused may also recover under No.
(Kierulf v. Court of Appeals, G.R. No. 99343, 1997) 3; and
2. Spouse, descendants, ascendants and
Moral damages is awarded only to enable the brothers and sisters for acts mentioned in Art.
injured party to obtain means, diversions or 309 (“Any person who shows disrespect to the
amusements that will serve to alleviate the moral dead, or wrongfully interferes with a funeral
suffering he has undergone, by reason of shall be liable to the family of the deceased for
defendant's culpable action and not intended to damages, material and moral.”).
enrich a complainant at the expense of defendant.
(Mayo v. People, G.R. No. 91201, 1991) Siblings Not Entitled to Moral Damages for
Death of their Brother / Sister
When Moral Damages Recoverable Article 2206 of the Civil Code entitles the
1. Criminal offense resulting in physical injuries descendants, ascendants, illegitimate children, and
2. Quasi-delicts causing physical injuries surviving spouse of the deceased passenger to
3. Seduction, abduction, rape or other acts of demand moral damages for mental anguish by
lasciviousness reason of the death of the deceased. The omission
4. Adultery and concubinage from Article 2206 (3) of the brothers and sisters of
5. Illegal or arbitrary detention or arrest the deceased passenger reveals the legislative
6. Illegal search intent to exclude them from the recovery of moral
7. Libel, slander or other form of defamation damages for mental anguish by reason of the death
8. Malicious prosecution of the deceased. Inclusio unius est exclusio alterius.
9. Acts mentioned in ART. 309 of the RPC (Sulpicio Lines, Inc., v. Curso, G.R. No. 157009,
relating to disrespect of the dead and March 17, 2010)
interference with funeral
10. Acts and actions referred to in Arts. 21, 26, 27, General Rule
28, 29, 30, 32, 34 and 35. (Art. 2219) The plaintiff must allege and prove the factual basis
for moral damages and its causal relation to the
NOTE: Art.2219 is not an exclusive enumeration. defendant’s act
Moral damages may also be awarded in cases of Exception

willful injury to property or breaches of contract Moral damages may be awarded to the victim in
where the defendant acted fraudulently or in bad criminal proceedings without the need for pleading
faith. (Art. 2220) proof of the basis hereof.
In culpa contractual, only in cases of gross Moral damages are mandatory without need of
negligence amounting to bad faith or in wanton allegation and proof other than the death of the
disregard of his contractual obligation. In a breach victim, owing to the fact of the commission of murder
of contract of carriage, moral damages may also be or homicide.
recovered in case of death of a passenger. (Espineli v. People of the Philippines, G.R. No.
179535, 2014)
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d. Temperate Damages
When Moral Damages Awarded Without
Evidence of Injury Concept
1. Rape cases. It is assumed that the victim has More than nominal but less than compensatory
suffered moral injuries (People v. Iroy, G.R. where some pecuniary loss has been suffered but
No. 187743, 2010); its amount can't be proved with certainty due to the
2. Murder cases. A violent death necessarily nature of the case. Also called “Moderate
brings about emotional pain and anguish on Damages.”
the part of the victim’s family (People v.
Rarugal, G.R. No. 188603, 2013); and In cases where the resulting injury might be
3. Where a broadcast is libelous per se, the continuing and possible future complications directly
law implies moral damages (FBNI v. AMEC, arising from the injury, while certain to occur are
G.R. No. 141994, 2005) difficult to predict, temperate damages can and
should be awarded on top of actual or compensatory
NOTE: In Filipinas Broadcasting Network v. AMEC, damages; in such cases there is no incompatibility
the Supreme Court held: between actual and temperate damages.
A juridical person is generally not entitled to moral Requisites

damages because, unlike a natural person, it cannot 1. Some pecuniary loss
experience physical suffering or such sentiments as 2. Loss is incapable of pecuniary estimation
wounded feelings, serious anxiety, mental anguish 3. Must be reasonable
or moral shock.
General Rule
Nevertheless, AMEC's claim for moral damages Actual Damages cannot be recovered with
falls under item 7 of Article 2219 of the Civil Code. temperate damages due to the nature of the said
This provision expressly authorizes the recovery of damages.
moral damages in cases of libel, slander or any Exception
other form of defamation. Article 2219(7) does not When the injury is chronic or recurring such as in
qualify whether the plaintiff is a natural or juridical loss of earnings.
person. Therefore, a juridical person such as a (Ramos v. Court of Appeals, G.R. No. 124354,
corporation can validly complain for libel or any 1999)
other form of defamation and claim for moral
damages. Temperate damages may also be awarded for injury
(Filipinas Broadcasting Network v. AMEC, G.R. No. to the plaintiff’s business standing or commercial
141994, 2005) credit if amount is not certain (and thus actual
damages cannot be granted).
c. Nominal Damages
e. Liquidated Damages
Concept
Nominal damages are adjudicated in order that a Those agreed upon by the parties to a contract, to
right of the plaintiff, which has been violated or be paid in case of breach thereof.
invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying When Liquidated Damages May Be Equitably
the plaintiff for any loss suffered by him. Reduced
1. Iniquitous or unconscionable;
Elements 2. Partial or irregular performance.
1. Plaintiff has a right;
2. Right of plaintiff is violated; and Rules Governing in Case of Breach of Contract
3. Purpose is not to identify but vindicate or Penalty may be imposed by stipulation or agreed
recognize right violated. upon by the parties in case of breach of contract.
Such penalty is in the nature of liquidated damages.
NOTE: The law presumes damage although actual
or compensatory damages are not proven. They are f. Exemplary Damages
damages in the name only and are allowed simply
in recognition of a technical injury based on a
Imposed by way of example or correction for the
violation of a legal right. Nominal damages cannot
public good, in addition to the moral, temperate,
coexist with actual or compensatory damages.
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liquidated to compensatory damages. Also called 3. IN CASE OF DEATH

“Corrective Damage.”
In Crimes and Quasi-Delicts Causing Death
NOTE: Exemplary damages cannot be recovered 1. Medical & Hospital Bills;
as a matter of right; the court will decide whether or 2. Civil Indemnity/ Damages for Death under Art.
not they should be adjudicated. 2206 (Automatically awarded);
3. Loss of earning capacity unless deceased had
When Recovered permanent physical disability not caused by
1. In Criminal Offenses defendant so that deceased had no earning
Exemplary damages as a part of the civil liability capacity at time of death;
may be imposed when the crime was 4. Support, if deceased was obliged to give
committed with one or more aggravating support (for period not more than 5 years); and
circumstances. Such damages are separate 5. Moral damages.
from fines and shall be paid to the offended
party. NOTE: Civil Indemnity for death is mandatory and a
matter of course, and without need of proof other
2. In Quasi-Delicts than the fact of death as the result of the crime or
Exemplary damages may be granted if the quasi-delict, and the fact that the accused was
defendant acted with gross negligence. responsible therefor.
3. In Contracts and Quasi-Contracts Article 2206 only imposes a minimum amount for
The court may award exemplary damages if the awards of civil indemnity, which is 3,000.00. The
defendant acted in a wanton, fraudulent, law did not provide for a ceiling. Thus, although the
Burden of Proof minimum amount for the award cannot be changed,
In case liquidated damages have been agreed increasing the amount awarded as civil indemnity
upon, although no proof of loss is necessary in order can be validly modified and increased when the
that such liquidated damages may be recovered, present circumstance warrants it.
nevertheless, before the court may consider the (People vs. Jugueta G.R. No. 202124, 2016)
question of granting exemplary in addition to the
liquidated damages, the plaintiff must show that he Death Caused by Breach of Contract by a
would be entitled to moral, temperate or Common Carrier
compensatory, damages were it not for the 1. Indemnity for death;
stipulation for liquidated damages. 2. Indemnity for loss of earning capacity; and
3. Moral Damages.
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ANNEXES
CULPA CONTRACTUAL v. CULPA AQUILIANA v. CULPA CRIMINAL
CULPA CULPA CULPA

CONTRACTUAL AQUILIANA CRIMINAL
Delict, or an act, or
OBLIGATION Breach of contract Quasi-delict
omission punishable by law
The act or omission that

violates a penal law.
The fault or negligence of the
VINCULUM
defendant which is the
JURIS / The contract itself. There is no crime unless
proximate cause of the damage
JURIDICAL TIE there is a law that defines
suffered by the plaintiff.
and punishes an act or
omission as a crime.
The plaintiff must establish:

(a) The damage suffered;
(b) The fault or negligence
of the defendant or The acts or omissions
The plaintiff must
some other person for constituting the crime, facts
ESSENTIAL establish:
whose acts the showing the time and/or
ALLEGATIONS (a) That a contract
defendant must place where the crime was
TO ESTABLISH exists; and
respond; committed (if these are
A CAUSE OF (b) That it was
(c) The causal connection essential elements of the
ACTION breached by
between (a) and (b); crime), and the aggravating
the defendant.
and circumstances, if any.
(d) That there is no pre-
existing contract
between the parties.
General rule: The

General rule: The plaintiff prosecution bears the
bears the burden of proving the burden of proving the
Fault or negligence is fault or negligence of the essential elements of the
presumed from the defendant. crime charged.
BURDEN OF
breach of a contract. No
PROVING
need to specifically Exceptions: In cases where the Exceptions: In cases
FAULT OR
prove that a contract fault or negligence of the where fault or negligence,
NEGLIGENCE
was breached through defendant may be inferred or when these are essential
fault or negligence. presumed (i.e. res ipsa loquitur, elements of the crime
negligence per se, vicarious charged, may be inferred or
liability, Art. 2188). presumed (i.e., res ipsa
loquitur).
QUANTUM OF
Preponderance of Proof of guilt beyond
EVIDENCE Preponderance of evidence
evidence reasonable doubt
REQUIRED
The contracting parties, Criminal liability only

their heirs, and assigns, The actual tortfeasor/s under attaches to principals,
PERSON/S except where the rights Art. 2176, and the persons who accomplices, accessories,
LIABLE and obligations are may be vicariously liable under and other persons
intransmissible by their Article 2180. specifically declared liable
nature, or by stipulation, for a crime under a penal
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or by provision of law. law.
The heir is not liable Civil liability may attach to

beyond the value of the the person guilty of a crime,
property he received or to persons declared by
from the decedent. law to be civilly liable for the
crime committed by another
(i.e., the parents of a minor
who is exempt from criminal
responsibility, or the
employer engaged in
business or industry of an
insolvent employee who
commits a crime in the
discharge of his duties).
Generally not available,

except when otherwise
provided by the penal law
(i.e., the Anti-Drunk and
AVAILABILITY
Drugged Driving Act and
OF THE
the Anti-Distracted Driving
DEFENSES OF
Act allow employers and
DUE DILIGENCE
operators of vehicles to
IN THE Not available. Available.
prove that they observed
SELECTION
extraordinary diligence in
AND
the selection and
SUPERVISION
supervision of their drivers
OF EMPLOYEES
in general, and the
offending driver in
particular, in order to evade
liability).
Actual, nominal,
temperate, and
exemplary (ANTE)
damages are
recoverable.
Moral damages
ANTE + moral damages are
generally cannot be
recoverable. All types of damages are
recovered in breach of
recoverable depending on
contract cases, except:
Liquidated damages generally the circumstances and the
(a) When the
not recoverable because an crime involved (i.e., when a
DAMAGES contract is
obligation based on quasi-delict contract is breached and
RECOVERABLE breached
cannot arise between parties the breach also constitutes
through bad
previously bound by contract. the crime of estafa, then
faith or gross
liquidated damages may
negligence, or
The exception is when a also be recovered).
in
contract is breached by tort.
circumstances
amounting to a
violation of Art.
21; and
(b) When a
passenger dies
as a result of a
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breach of a
contract of
carriage.
Liquidated damages
can only be recovered in
cases where a contract
is breached as they
presuppose the
existence of a contract
where a provision for
liquidated damages is
included.
Criminal liability generally

cannot be compromised
except in cases of private
POSSIBILITY OF
Possible. Possible. crimes.
COMPROMISE
Civil liability may be
compromised.
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TABLE ON VICARIOUS LIABILITY
PERSON FOR REQUIREMENTS

PERSON
WHOM FOR VICARIOUS NATURE OF
VICARIOUSLY DEFENSES
VICARIOUSLY LIABILITY TO LIABILITY
LIABLE
LIABLE ATTACH
Father and mother
exercise joint
Child lives in their parental authority
company; AND is over their minor
PARENT/S (JOINT Children below under their parental children. Their
PARENTAL 18. authority. liability is direct
AUTHORITY based Diligence of a good and primary, not
on Art. 221, Family (Art. 221, Family (Art.2180, in relation to father of a family to subsidiary.
Code) Code) Art.221, Family Code; prevent damage.
FATHER, IN CASE Tamargo v. CA, G.R. No. (Art. 211, Family
OF DEATH OR 85044, 1992) (Art. 2180; Exconde v. Code; Libi v. IAC,
INCAPACITY, THE Capuno, G.R. No. L- G.R. No. 70890,
MOTHER (Art. 10134, 1957) 1992)
2180) Children 18 to “Child” lives in their Direct and
21. company. primary.
(Art. 2180, in (Art.2180, in relation to (Art. 2180 in relation

relation to Art. 236 Art. 236, ¶ 3, Family to Art. 236, ¶ 3,
¶ 3, Family Code) Code) Family Code)
Principal and
solidary.
(Art. 219, Family

Code)
SCHOOLS, General Rule:

ADMINISTRATORS Parents are not
AND TEACHERS, liable; child was in
Child is under their Exercised the school; not in their
INDIVIDUALS,
Children below supervision, proper diligence custody
ENTITIES, OR
18. instruction or custody required under the
INSTITUTIONS
at the time the tort is particular (Cuadra vs. Monfort,
ENGAGED IN
(Arts. 218- 219, committed. circumstances. G.R. No. L-24101,
CHILD CARE Family Code) 1970)
HAVING SPECIAL
(Art. 218, Family Code) (Art. 219, Family Code)
PARENTAL Exception:
AUTHORITY OVER Parents, judicial
CHILDREN guardians or
persons exercising
substitute parental
authority shall be
subsidiarily liable.
(Art. 219, Family
Code)
Minors or Under their authority Diligence of a good
Direct and
incapacitated and live in their father of a family to
GUARDIANS primary.
persons. company. prevent damage.
(Art. 2180)
(Art. 2180) (Art. 2180) (Art. 2180)
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Employees in That the employee is

the service of liable for a QD;
the branches in EER exists; and
which they are employee was acting No EER.
employed or on within the scope of his
(Jayme v Apostol, G.R.
the occasion of assigned tasks when No. 136609, 2008) –
their functions. the tort was municipality, not the
committed, or that the mayor is the employer
(Art. 2180(4)) injurious act was of the driver).
committed at a time
the employee was EE acted beyond
performing his the scope of Direct and
functions. authority (i.e. when primary.
the EEs are on
(Dela Llana v. Biong, strike). (Art. 2180)
Employees and G.R. No. 182356, 2013;
EMPLOYERS, Castilex Industrial Corp. (Universal Aquarius v. NOTE: “Manager”
household
OWNERS, AND vs. Vasquez, G.R. No. QC Human Resources means employer.
helpers acting 132266, 1999; Martin v.
MANAGERS Management
within the scope CA, G.R. No. 82248, Corporation, G.R. No. (Philippine Rabbit Bus
of their assigned 1992; Jayme v. Apostol, 155990, 2007) Lines, Inc. v.
tasks even G.R. No. 136609, 2008)
Philippine American
though the Diligence of a good Forwarders, Inc., G.R.
employer is not NOTE: “Acting within father of a family in No. L-25142, 1975)
engaged in any the scope of assigned the selection and
business or tasks” – includes any supervision of
industry. act done in the employees.
furtherance of the
(Art. 2180(5)) employer’s business. (Mercury Drug v.
Huang, G.R. No.
(Filamer Christian 172122, 2007; Sanitary
Institute v. IAC, G.R. Steam vs. CA, G.R.
No.75112 1990) (e.g., No. 119092, 1998)
janitor who drove vehicle
for the benefit of the
employer).
[3 THEORIES]
1. EER (Art.2180)
1. Elements of the
2. Doctrine of 3 theories are
Apparent not present;
Doctors and Authority or and
hospital Ostensible 2. Due diligence
employees. Agency or in the selection
“Holding out” and Direct and
(Ramos v. CA G.R. Reliance supervision (if primary.
No. 124354, 1999 (Nogales vs. Capitol EER).
HOSPITALS and 2002; Nogales Medical Center, G.R. (Casumpang v.
v. Capitol Medical No. 142625, 2006; Cortejo, G.R. No.
(Art. 2180(5); Nogales
Center G.R. No. Professional 171127, 171217, &
vs. Capitol Medical
142625, 2006; Services Inc.v. 17122, 2015)
Center, G.R. No.
Casumpang v. Agana G.R. No. 142625, 2006;
Cortejo, G.R. No. 126297, 2007; G.R. Professional Services
171127, 171217, & No. 126467, 2008; Inc.v. Agana G.R. No.
17122, 2015) G.R. No. 127590, 126297, 2007; G.R.
2010) No. 126467, 2008;
G.R. No. 127590,
3. Doctrine of 2010)
Corporate
Negligence:
Hospital is liable
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for its own

negligence; not
vicariously for the
doctor’s or
medical
personnel’s
negligence.
(Professional
Services Inc.v.
Agana, supra)
RULES:
Special agent –
i.e., one who Public officials (PO)
receives a performing
definite and functions of his
fixed order or office – State is
commission, immune from suit.
foreign to the Public official liable
exercise of the under Art.2176.
duties of his
office if he is a PO specially
special official. commissioned to
perform a task Observed diligence
(Art.2180; Merritt v. foreign to his office of a good father of a
GPI, G.R. No. L- – State liable; PO is a family to prevent
11154, 1916)
special agent. damage.
Government (Art.2180) Direct and

Private individual
Owned and primary.
(PI) commissioned
Controlled Observed diligence
STATE by the State to
Corporations of a good father of a (Art. 2180; Fontanilla
perform non-
(GOCCs) – family in the v. Maliaman, G.R.
governmental Nos. 55963 & 61045,
When the selection and
functions – State is 1991)
government supervision of
liable as an employer.
enters into a employees.
commercial
PI commissioned to (Fontanilla v.
business, it
perform a special Maliaman, G.R. No. L-
abandons its
governmental task 55963, 1989)
sovereign
(special agent) –
capacity and is
State liable.
to be treated like
any other private
Employees of
corporation.
government offices
performing
(Manila Hotel
Employees proprietary
Association v. functions – State
Manila Hotel liable as an employer.
Company, G.R. L-
48524, 1941) (Fontanilla v. Maliaman,
G.R. No. L-55963, 1989)
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Direct and
primary.
NOTE: Applies
whether the
institution is
Student is in the
academic or not.
school premises in
pursuance of a (Amadora v. CA,
legitimate student supra)
Adult pupils and objective, in the
students (for exercise of a Basis of liability
teachers). legitimate student of teacher and
right, and even in the head = close
Adult enjoyment of a supervisory
apprentices (for legitimate student relationship; ability
heads of privilege, the to instill discipline.
establishments responsibility of the
of arts and school authorities Teacher was not
General Rule:
trades). over the student negligent.
School is not
continues. liable.
TEACHERS/ (Art.2180; Amadora NOTE: Art.2180
HEADS OF v. CA, G.R. No. L-
Indeed, even if the does not apply
47745, 1988) when the tort was Exception: When
ESTABLISHMENTS student should be it is being held
OF ARTS AND doing nothing more not committed by a
If pupil, student student. liable as an
TRADES than relaxing in the employer.
or apprentice is
a minor, apply campus in the
(Aquinas School vs.
Art. 218, Family company of his Sps. Inton, G.R. No. (Amadora v. CA,
Code. classmates and 184202, 2011) supra)
friends and enjoying
NOTE: Pupil the ambience and School has an
need not live or atmosphere of the implied contractual
board with the school, he is still duty to maintain a
teacher. within the custody and safe environment
subject to the conducive for
(Palisoc v.Brillates, discipline of the learning. If it
G.R. No. L-29025, school authorities breaches that duty
1971) under the provisions through
of Art. 2180. negligence, it may
be held liable
(Amadora v. CA, G.R. No. under Art. 2176.
L-47745, 1988)
(PSBA v. CA, G.R.
No. 84698, 1992, in
relation to Air France
vs. Carrascoso, G.R.
No. L-21438, 1966).
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PART II: CIVIL LAW II (AND 6. Legal vs. Voluntary Easement

7. Kinds of Legal Easements
PRACTICAL EXERCISES)
a. Relating to waters
b. Relating to way
I. PROPERTY c. Light and View
G. NUISANCE
TOPIC OUTLINE UNDER THE SYLLABUS 1. Nuisance per se
2. Nuisance per accidens
A. CLASSIFICATION OF PROPERTY 3. Liabilities
1. Immovables 4. No prescription
2. Movables 5. Remedies Against a Public Nuisance
6. Remedies Against a Private Nuisance
B. OWNERSHIP 7. Criminal prosecution
1. General Provisions 8. Judgment with abatement
a. Bundles of Rights 9. Extrajudicial abatement
b. Distinction between real and personal rights 10. Special injury to individual
c. Modes of acquiring ownership 11. Right of individual to abate a public nuisance
d. Limitations of ownership 12. Right to damages
2. Rules on Accession 13. Defenses to action
a. For immovables 14. Who may sue on private nuisance
b. For movables
c. Rights of Builder/planter/sower in good faith H. MODES OF ACQUIRING OWNERSHIP
1. Occupation
C. CO-OWNERSHIP 2. Donations
1. Characteristics of co-ownership a. Nature
2. Sources of co-ownership b. Persons who may give or receive a donation
3. Rights of co-owners c. Effects and limitations of donation
4. Termination of co-ownership d. revocation and reduction
3. Prescription
a. General provisions
D. POSSESSION
b. Prescription of ownership and other real
1. Characteristics
rights
2. Kinds of Possession
c. Prescription of actions
3. Acquisition of possession (including
possession based on tolerance)
4. Effects of possession I. QUIETING OF TITLE
5. Loss or unlawful deprivation of a movable 1. Requisites
2. Distinctions between quieting of title and
removing / preventing a cloud
E. USUFRUCT
3. Prescription / non-prescription of action
1. Characteristics
2. Classification
J. ACTIONS TO RECOVER PROPERTY
3. Rights and obligations of usufructuary
1. Accion interdictal
4. Rights of the owner
2. Accion publiciana
5. Extinction, termination, and extinguishment
3. Accion reinvidicatoria
F. EASEMENTS
1. Characteristics
2. Classification
3. Modes of acquiring easements
4. Rights and obligations of the owners of the
dominant and servient estates
5. Modes of extinguishment
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A. CLASSIFICATION OF PROPERTY b) Specific – one referring to a single, unique

object
What are the Classifications of Property as to
Mobility? What are the Classifications of Property as to
a) Movable Whether in The Custody Of The Court Or Free?
b) Immovable a) In “Custodia Legis” – in the custody of the
court
What are the Classifications of Property as to b) “Free” property (Tolentino, supra, p. 7-10)
Ownership?
a) Public property 1. IMMOVABLES
b) Private property
What are the Four Juridical Classifications of
What are the Classifications of Property as to Immovable Properties? (NIDA) (Tolentino, supra,
Alienability? p. 8)
a) Within the commerce of man (or which may 1. by Nature
be the objects of contracts or judicial 2. by Incorporation
transactions) 3. by Destination
b) Outside the commerce of man 4. by Analogy
What are the Classifications of Property as to What are those that are Immovable by NATURE?
Existence? – What cannot be moved from place to place?
a) Present property (res existents) 1. Land (Art. 415 (1))
b) Future property (res futurae) 2. Buildings (Art. 415 (1))
3. Roads (Art. 415 (1))
4. Constructions of all kinds adhered to soil
Note: Both present and future property may be the
5. Mines, quarries, and slag dumps, while the
subject of sale but generally not the subject of
matter forms part of the bed (Art. 415 (8))
donation.
6. Waters, either running or stagnant (Art. 415 (8))
What are the Classifications of Property as to
Materiality? Note: A structure, which is merely superimposed on
the soil, may be considered movable. Similarly, a
a) Tangible or corporeal
shovelful of land is a movable for it is no longer
b) Intangible or incorporeal
adhered to the soil.
What are the Classifications of Property as to Note: When the minerals have been extracted, they
Dependence or Importance? become movables.
a) Principal
b) Accessory Buildings are always immovable under the Code. The
mere fact that the parties to a contract treat the
What are the Classifications of Property as to building as separate does not change its character as
Capability of Substitution? immovable property. (Punsalan v. Lacsamana, GR
No. L-55729, 1983)
a) Fungible: Capable of substitution by other
things of the same quality and quantity
Once a house is demolished, its character as an
b) Non-Fungible: Incapable of such
immovable ceases. (Bicerra v. Teneza, GR No. L-
substitution, hence, the identical thing must
16218, 1962)
be given or returned
A mortgage of land necessarily includes buildings, in
What are the Classifications of Property as to the absence of stipulation of the improvements
Nature or Definiteness? thereon. A building by itself may be mortgaged apart
a) Generic – one referring to a group or class from the land on which it has been built. Such would
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be a real estate mortgage for the building would still What are the requisites of the properties that are
be considered immovable property. (Leung Yee v. attached to an Immovable in a Fixed Manner?
Strong Machinery, GR No. L-11658, 1918) 1. Intent to attach permanently is essential;
2. In case of separation, the injury, breakage,
A valid real estate mortgage can be constituted on deterioration must be Substantial. (Art. 415 (3))
the building erected on the land belonging to another.
(Prudential Bank v. Panis, GR No. L-50008, 1987)
What are the Schools of Thought in Temporary
Separation?
A party to a chattel mortgage is estopped from
May either be:
assailing the deed as void on the ground that
1. Immovable if there is intent to put them back; or
the house subject of the mortgage is real property. 2. Movable because the material fact of
Parties are bound by their agreement, but not third incorporation is what determines its condition.
persons. (Tumalad v. Vicencio, GR No. L-30173,
1971) What are the requisites of Statues, Reliefs,
Painting, or Other Objects for Use or
If contracting parties stipulate that a real property be Ornamentation?
considered personal, they are consequently 1. Placed by the Owner of the immovable (not the
estopped from claiming otherwise. However, third object) or his agent;
persons acting in good faith are not affected by the 2. Intent to attach them Permanently to the
stipulation characterizing the subject machinery as tenements. (Art. 415 (4))
personal. (Serg’s Products v. PCI Leasing, GR No.
137705, 2000)
What are the requisites of Animal Houses, Pigeon
Houses, Beehives, Fishponds, or Breeding
What are Immovables by INCORPORATION? –
Places of Similar Nature?
What are those that are essentially movables but
attached to an immovable in a fixed manner to be an 1. Placed by the Owner of the immovable or his
integral part of it? agent;
2. Intent to attach them Permanently to the land.
1. Trees, plants, and growing crops (Art. 415 (2))
(Art. 415 (6))
2. Everything attached to an immovable in a fixed
manner (Art. 415 (3))
3. Statues, reliefs, paintings, or other objects for Note: Includes the animals found therein.
use or ornamentation, placed in buildings or on
land (Art. 415 (4)) What are considered as Immovable by
4. Animal houses, pigeon houses, beehives, DESTINATION? – What are properties that are
fishponds, or breeding places of similar nature movable placed on immovable for the utility it gives
(Art. 415 (6)) to the activity carried thereon?
1. Machinery, receptacles, instruments, or
What are considered as Trees, Plants, and implements (Art. 415 (5))
Growing Crops? 2. Fertilizer actually used on a piece of land (Art.
Trees and plants are immovable by incorporation if 415 (7))
they are planted through labor but are immovable by 3. Docks and structures which, though floating, are
nature if they are spontaneous products of the soil. intended by their nature and object to remain at
a fixed place on a river, lake, or coast (Art. 415
Note: Once cut or uprooted, they cease to be (9))
immovable.
What are the requisites of Machinery,
What are the Exceptions? Receptacles, Instruments or Implements for an
1. Uprooted timber if the land is timber land (timber Industry or Works?
still forms an integral part thereof); 1. Industry or works must be Carried on inside the
2. Trees blown by a typhoon (part of the land upon building or on the land;
which they rest)
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2. Placed by the Owner of the building or property 2. MOVABLES

or his agent;
3. Machines must be Essential and principal What are considered as Movable? (SIFTOS)
elements in carrying out the industry; 1. Susceptible of appropriation that are not included
4. Machines must tend Directly to meet the needs in enumeration in immovables. (Art. 416 (1))
of said industry or works (adaptability). (Art. 415 2. Immovables that are designated as movables by
(5)) special provision of law. (Art. 416 (2))
3. Forces of nature brought under control by
Note: Incidentals are not included (movables without science. (Art. 416 (3))
which the businesses can still continue or carry on
their functions) 4. Things which can be transported w/o impairment
of real property where they are fixed (Art. 416 (4))
Machinery is immobilized if placed by owner of plant 5. Obligations, which have for their object movables
or property; not so if placed by a tenant or or demandable sums (credits), obligations and
usufructuary or any person having any temporary actions must be legally demandable -
right. (Davao Sawmill Co. v. Castillo, GR No. L- demandable sums must be liquidated (Art. 417
40411, 1935) (1))
6. Shares of stock of agricultural, commercial &
Equipment destined only to repair or service a industrial entities although they may have real
transportation business may not be deemed real estate (Art. 417 (2))
property. (Mindanao Bus v. City Assessor, GR No. L-
17870, 1962) What is an example of “Susceptible of
Appropriation”?
Note: Attachment or incorporation to the immovable An interest in business, that is, providing
is not essential. telecommunication and telephone service, is
personal property since it is capable of appropriation
Fertilizer Actually Used on a Piece of Land and not included in the enumeration of real
Fertilizers still in the barn or still wrapped inside some properties. Thus, it could be subject of theft under the
newspaper even though already on the ground are RPC. (Laurel v. Abrogar, GR No. 155076, 2009)
still movables.
What is an example of a movable Designated by
Docks and Floating Structures Special Provision of Law?
Docks and structures which, though floating, are Growing crops are considered immovable under Art.
intended by their nature and object to remain at a 415(2) but personal property under Chattel Mortgage
fixed place on a river, lake, or coast are considered Law (Sibal v. Valdez, GR No. L-26278, 1927)
immovable. (Art. 415 (9))
House built on leased land may be treated as
Note: A floating house is an immovable if it is tied to personal property and be the object of a chattel
a shore or bank post, since it is a movable. mortgage, insofar as the parties are concerned.
Otherwise, it assumes the category of a vessel. (Navarro v. Reyes, GR No. L-18456, 1963)
Note further: Although personal property, vessels What are examples of Forces of Nature?
partake, to a certain extent, the nature and conditions Electricity, gas, rays, heat, light, oxygen, atomic
of real property because of their value and energy, water, power etc. Electricity, the same as
importance in the world of commerce. gas, is an article bought and sold like other personal
property and is capable of appropriation by another.
Immovable by Analogy or by Law – Contracts for (United States v. Carlos, GR No. 6295, 1911)
public works and servitudes & other real rights over
immovable property (Art. 415 (10)) What are the two Classifications of Movables
According to Nature?
1. Consumable – cannot be utilized w/o being
consumed
2. Non-consumable (Tolentino, supra, p. 10)
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What are the two Classifications According to 3. Sole Ownership – ownership is vested only in
Intention of the Parties/Purpose? (whether it can one person
be substituted by other things of same kind, quality, 4. Co-Ownership/ Tenancy in Common –
and quantity) ownership is vested in two or more owners; unity
1. Fungible (res fungibles) – only the equivalent is of the property, plurality of the subjects; each co-
returned owner is the owner of the whole and at the same
2. Non-fungible (res nec fungibles) – the identical time, the owner of an undivided part thereof.
thing is returned; do not admit of substitution
(Tolentino, supra, p. 10) a. Bundle of rights
What are the Tests To Determine Whether What are the Seven Rights of Ownership? (PUFA-
Property Is Real or Personal? DVA) (De leon, Comments and Cases on Property,
77, 1993)
1. Whether the property can be transported or
carried from place to place 1. Jus Possidendi (right to possess)
2. Whether such change of location can be made a. Right to hold the thing and does not
without injuring the immovable to which the object necessarily include the right to use (e.g.,
may be attached contract of deposit)
3. Whether the object does not fall within any of the
cases enumerated in Art. 415 2. Jus Utendi (right to use and enjoy)
a. Includes the right to exclude any person
from the enjoyment and disposal thereof
B. OWNERSHIP
b. Limitation: use in such a manner as not to
injure the rights of a third person
1. GENERAL PROVISIONS
What is OWNERSHIP? 3. Jus Fruendi (right to fruits)

The independent and general right of a person to the a. Right to the fruits
exclusive enjoyment and control of a thing in his b. Kinds of Fruits: (NIC)
possession, enjoyment, disposition, and recovery, i. Natural
subject only to the restrictions or limitations ii. Industrial
established by law and the rights of others. (Art. 427) iii. Civil
Possession is an essential attribute of ownership. 4. Jus Abutendi (right to consume)

Whoever owns the property has the right to possess a. Includes the right to transform or abuse or
it. Adjudication of ownership includes the delivery of destroy by its use
possession if the defeated party has not shown any
right to possess the land independently of her 5. Jus Disponendi (right to dispose)
rejected claim of ownership. (Pascual vs. Daquioag, a. Also includes the right not to dispose, or to
GR No. 162063, 2014) alienate
What is TITLE? 6. Jus Vindicandi (right to vindicate or recover)

That which constitutes a just cause of exclusive a. Includes the right of action against the holder
possession or which is the foundation of ownership and possessor of the thing in order to
of property. In the Philippines, the word “title” is also recover it
used in common or colloquial language to refer to a
piece of paper such as an OCT or TCT. 7. Jus Accesionis (right to accessories)
What are the KINDS OF OWNERSHIP?

1. Full Ownership (dominium or jus in re propia) –
includes all the rights of the owner
2. Naked Ownership (nuda proprietas) – where the
right to the use and the fruits has been denied
a. Naked ownership + Usufruct = Full ownership
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b. Distinction between real and

personal rights c. Modes of acquiring ownership
Real Right v. Personal Right What are the Modes of Acquiring Ownership?
Jus in Rem Jus in Personam (OLD-TIPS)
The power of a person The power belonging to 1. Occupation
to obtain certain a person to demand 2. Law
financial or economic from another, as
3. Donation
advantage over a definite passive
specific thing, a power subject-debtor, the 4. Tradition
enforceable against the fulfilment of a prestation 5. Intellectual Creation
whole world, whether or to give, to do, or not to 6. Prescription
not he possesses the do. 7. Succession (Art. 712)
thing.
Has a specific object Affects all the present What is the definition of Mode?
and future property of It is the process of acquiring or transferring
the debtor ownership
There is one definite There is a definite
active subject (like the active subject (the What is the definition of Title?
owner or usufructuary); creditor); and a definite
It is the juridical act, right or condition which gives the
the rest of the world is passive subject (the
juridical justification for a mode or means to their
the indefinite passive debtor). Thus, a
subject. Thus, a real personal right is acquisition, but which in itself is insufficient to
right follows its object in enforceable only produce them. (De Leon, supra, p. 578-579). In the
the hands of the against the original Philippines the word “title” is also used in common or
possessor (binding on debtor or a transferee colloquial language to refer to a piece of paper or
the whole world) who has notice or land title such as an OCT or TCT.
knowledge
The right is created It is exercised thru
What is the Difference between Mode and Title?
directly over a thing another person, against
whom an action may be MODE TITLE
brought Directly and Serves merely to give
The right is over a thing The right is to a thing immediately produces the occasion for its
Limited by the value, Not so limited a real right acquisition or
use or productivity of existence
the things The cause The means
Created by both mode Created by title alone, Proximate cause Remote cause
& title except when the title is Essence of the right Means whereby that
at the same time the
which is to be created essence is
mode, as in succession
or transmitted transmitted
Subject matter is Subject matter is
generally corporeal intangible or
incorporeal (for it is the What is the definition of Original Mode?
fulfilment of the duty or There being no previous or pre-existing or preceding
prestation) title or right of another.
Extinguished by loss or Not extinguished by
destruction loss or destruction What is Derivative Mode?
There was a preceding owner. (De Leon, supra, p.
580)
d. Limitations of ownership
What are the Limitations on the Right of

Ownership? (CLOGS) (De leon, supra, p. 92)
1. Those arising from Conflicts of private rights (e.g.,
those which take place in accession continua)
2. Those imposed by Law (e.g., Legal easements)
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3. Those imposed by the Owner himself (e.g., Note: It is not one of the modes of acquiring
Voluntary easement, pledge, lease) ownership enumerated in Art. 712. (Manresa, 6th Ed.,
4. Those imposed by the Grantor of the property on Vol. 3, p. 116; 180-182)
the grantee
a. by contract (e.g., donation) What are the Classifications of Accession?
b. by last will 1. Accession Discreta
5. Those imposed in general by the State (Art. 435) 2. Accession Continua
a. Power of eminent domain
b. Police power
What is the definition of ACCESSION DISCRETA?
c. Power of taxation
Accession Discreta is the extension of the right of
ownership of a person to the products of a thing
When is the Right of Ownership not Absolute? which belong to such person. (Paras, Civil Code of
The welfare of the people is the supreme law of the the Philippines Annotated Property Articles, 414-773,
land (Salus populi suprema est lex). 211, 2016)
Note: The owner bears the loss of the property When does accession take place?
owned by him (Res perit domino).
1. Natural Fruits – spontaneous products of the
soil and the young of animals.
What are the Limitations Imposed by The State:
2. Industrial Fruits – those produced by lands of
1. Eminent Domain; any kind through cultivation or labor.
2. Police Power; 3. Civil Fruits – rent of buildings, the price of lease
3. Taxation of lands and other property and the amount of
perpetual or life annuities or other similar
HIDDEN TREASURE income. (Art. 442)
Article 438. Hidden treasure belongs to the owner of
the land, building, or other property on which it is General Rule: All fruits belong to the owner of a
found. Nevertheless, when the discovery is made on thing. (Art. 441)
the property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof shall Exceptions: (PULPA)
be allowed to the finder. If the finder is a trespasser,
1. Possession in good faith by another; (Art. 554
he shall not be entitled to any share of the treasure.
(1))
2. Usufruct; (Art. 566)
If the things found be of interest to science or the arts,
3. Lease of rural lands; (Art. 1654)
the State may acquire them at their just price, which
4. Pledge;
shall be divided in conformity with the rule stated.
5. Antichresis. (Art. 2132)
(351a)
Article 439. By treasure is understood, for legal What is the definition of ACCESSION
purposes, any hidden and unknown deposit of CONTINUA?
money, jewelry, or other precious objects, the lawful Accession Continua is the extension of the right of
ownership of which does not appear. (352) ownership of a person to that which is incorporated
or attached to a thing which belongs to such person.
2. RULES OF ACCESSION When may it take place?

What is the definition of Accession? 1. With respect to real property
Right of the owner of a thing, real or personal, to a. Accession industrial;
become the owner of everything which is produced b. Accession natural
thereby, or which is incorporated or attached thereto, 2. With respect to personal property
either naturally or artificially. (Art. 440) a. Adjunction or conjunction;
b. Commixtion or confusion;
c. Specification. (Paras, supra, p. 209-
210)
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What are the Rules when Landowner

Landowner – Owner of Materials Builder/Planter/Sower (LO-BPS) makes
Builder/Planter/Sower (OM) Constructions/Plantings with Materials of
(LO-BPS) Another (OM)? (Art. 455)
A. Good Faith Good Faith
Note: This chart is from Atty. Francis H. Ampil
LO-BPS can acquire the OM is entitled to full
materials provided there payment or OM may
isfull payment. remove the materials What is Planting?
provided there is no Planting pertains to a perennial fact. Something that
substantial injury to will grow and produce fruits year after year without
work done. having to be replanted. (Paras, supra, p. 220-221)
B. Good Faith Bad Faith
LO-BPS can acquire OM loses the Note: Planter may be required to buy the land.
the materials for free materials and will be
and will be entitled to liable for damages What is Sowing?
damages due to defects due to defects or Sowing pertains to an annual crop. Something that
or inferior quality of the inferior quality of the will grow and produce fruits and then you plant again
materials. materials. before it will produce fruits again. (Paras, supra, p.
C. Bad Faith Good Faith 221)
LO-BPS can acquire the OM is entitled to full
materials provided there payment for the
Note: Sower may be required to pay rent.
isfull payment plus materials plus
damages. damages or OM may
remove the materials What are the Exceptions to the Rule on Builders:
even if there is Possession as Mere Holder?
substantial injury to Rule does not apply where the builder, knowing that
the work done plus
the land is not his, does not claim ownership over the
damages.
land but possesses it as mere Holder, agent,
D. Bad Faith Bad faith
usufructuary or tenant. (Paras, supra, p. 243)
Same as A. Same as A.
Is there an Exception to the exception?
1. Tenant whose lease is about to expire, but still
What are the principles of Accession Industrial?
sows, not knowing that the crops will no longer
1. Accessory follows the principal. belong to him.
2. The incorporation or union must be intimate that 2. A person constructs a building on his own land,
removal or separation cannot be effected without and then sells the land but not the building to
substantial injury to either or both. another.
3. Good faith exonerates a person from punitive a. No question of good faith or bad faith on the
liability, but bad faith may give rise to dire part of the builder can be compelled to
consequences. remove the building;
4. Bad faith of one party neutralizes the bad faith of b. New owner will not be required to pay any
the other. indemnity for the building (Golengco v.
5. No one should enrich himself at the expense of Regalado, 48 O.G. 5282)
another. (Paras, supra, p. 221) 3. Builder is a belligerent occupant (Republic v.
Lara, 50 O.G. 5282)
a. For Immovables 4. Builder, etc. is a co-owner even if later on, during
the partition, the portion of land used is awarded
What are the Two Disputable Presumptions as To to another co-owner; (Viuda de Arias v. Aguilar,
Improvements on Land? 40 O.G., 1941)
1. Works are made by the owner
2. Works are made at the owner’s expense (Art. Note: For the rule to apply, the construction must be
446) of a permanent character, attached to the soil with an
idea of perpetuity.
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If it is of a transitory character or is transferable, there

is no accession, and the builder must remove the What are the Rules When Landowner Sells Land
construction. (Alviola v. CA, GR No. 117642, 1998) To a 3rd Person Who Is in Bad Faith?
Builder must go against the third person. When the
A mere promise by the landowner to donate the third person has paid the landowner, the builder may
property to the builder cannot convert the latter into a still file a case against the third person.
builder in good faith. If at all, he is a mere possessor
by tolerance. A person whose occupation of realty is The third person may file a 3rd party complaint
by tolerance of its owners is a not possessor in good against the landowner.
faith. Hence, he is not entitled to the value of the
improvements built thereon. (Verona Pada-Kilario v.
CA, GR No. 134329, 2000)
Landowner (LO) Builder/Planter/Sower (BPS)

A. Good Faith Good Faith
Option 1: To acquire whatever has been built, To receive payment for the value of the land and
planted or sown and payment of the necessary necessary, useful and luxurious expenses(if LO wants
expenses, useful expenses and luxurious to get luxurious improvements) with right of retention
expenses (if the LO wants to get the luxurious without any obligation topay rent until full payment.
improvements).
To remove the useful improvements provided it does not
cause any injury (this is part of right of retention).
If LO does not get the luxurious improvements,BPS can

remove the same provided there is no injury to the land
or the building.
Option 2: To oblige the BP to buy the land or the To purchase land at fair market value provided its value
S to pay rent unless the value of the land is is not considerably more than that of the building or trees.
considerably more than that of the building or
trees. If BP cannot pay purchase price of the land or the S
cannot pay the rent, LO can require BPS to remove
whatever has been built, planted or sown.
If the value of land is considerably more than that of the

building or trees, BPS cannot be compelled to buy the
land. In such case, BPS will pay reasonable rent.
If BPS cannot pay the rent, LO can eject BPSfrom the

land.
B. Good Faith Bad Faith
Option 1: To acquire whatever has been built, Loses whatever has been built, planted or sownand liable
planted or sown for free but must pay necessary to pay damages.
expenses and luxurious expenses (if LO wants
to get the luxurious improvements) plus Entitled to payment for necessary expenses for
damages. preservation without right of retention.
Not entitled to payment for useful expenses andcannot

remove even if removal will not cause injury.
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If LO wants luxurious improvements, BPS is entitled to

payment. The value of the luxurious improvements will be
as of the date LO obtainspossession.
If LO does not want luxurious improvements, BPS may

remove luxurious improvements if it will not cause injury.
Option 2: To oblige BP to buy land or S to pay Obliged to pay for land or to pay rent plus damages
rent plus damages regardless whether the value regardless whether the value of the land is considerably
of the land is considerably more than that of the more than that of the building or the trees.
building or the trees.
Option 3: To compel BPS to remove or Obliged to remove or demolish work done plusdamages.
demolish work done plus damages.
C. Bad Faith Good Faith
To pay for whatever has been built, planted or Option 1: To receive payment for whatever hasbeen built,
sown plus damages. planted or sown plus damages.
Option 2: To remove whatever has been built, planted or

sown even if it will cause injury plusdamages.
BPS has no option to acquire or buy the land.

D. Bad Faith Bad Faith
Same as A. Same as A.
Note: This chart is from Atty. Francis H. Ampil.
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ACCESSION
Accession Accession
Discreta Continua
Natural Industrial Civil Real Personal

Fruits Fruits Fruits
Accession Accession Adjunction/ Specification Mixed

Industrial Natural Conjunction
Spontaneous
products of the rents of buildings
soil, price of leases of commixtion
Young and other land & (ISTEP) confusion
products of other property Inclusion or
animals Building
amount of engraftment
Planting Alluvium
perpetual or life Soldadura or
Sowing Avulsion
annuities or soldering
Change of
other similar Tejido or
course
income weaving
of rivers
Escritura or
Formation of
writing
islands
Pintura or
Painting
ksajhdjas
Pintura or
Painting
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ACCESSION NATURAL them to be the property of the owners of the estates

adjacent thereto and as an increment thereof.”
What are the Principal Forms of Accession (Lanzar v. Dir. Of Lands, GR No. L-31934, 1977)
Natural?
1. Alluvium (Art. 457) What is Avulsion?
2. Avulsion (Art. 459) Accretion which takes place when the current of a
3. Change in the course of rivers (Arts. 461-462) river, creek, or torrent segregates from an estate on
4. Formation of islands (Art. 464-465) its bank a known portion and transfers it to another
estate, in which case, the owner of the estate to
What is Alluvium? which the segregated portion belonged, retain the
The accretion which the banks of rivers gradually ownership thereof provided he removes the same
receive from the effects of the current of the waters within two years. (Art. 459)
and which belong to the owners of lands adjoining
the said banks. (Art. 457) What are the differences between Alluvium and
Avulsion?
What is Accretion? ALLUVIUM AVULSION
Act or process by which a riparian land gradually Deposit of soil is Deposit of soil is
and imperceptibly receives addition made by the gradual and sudden or abrupt.
water to which the land is contiguous. (Paras, supra, imperceptible.
p. 265) Soil cannot be Soil is identifiable and
identified. verifiable.
What are the Essential Elements of Alluvium? Deposit of soil belongs Deposit of soil belongs
(GCA) to the owner of the to the owner from
1. Deposit or accumulation of soil or sediment property to which it is whose property it was
must be Gradual and imperceptible. (Art. 457) attached. detached provided he
2. Accretion results from the effects or action of removes the same
the Current of the waters of the river. (Gov’t of within two years.
the Phils. v. Cabangis, 53 Phil. 112, 1929)
3. The land where accretion takes place must be What are the Essential Elements of Avulsion?
Adjacent to the bank of a river. (Art. 457) (CSK)
1. Segregation and transfer must be caused by the
Registration under the Torrens System does not Current of a river, creek or torrent. (Art. 459)
protect the riparian owner against the diminution of 2. Segregation and transfer must be Sudden or
the area of his registered land through gradual abrupt. (Canas v. Tuason, 5 Phil. 688, 1929)
changes in the course of an adjoining stream. 3. The portion of land transported must be Known
(Viajar v. CA, GR No. 77294, 1998) or identifiable. (Art. 459)
Failure to register the acquired alluvial deposit by Note: In avulsion, the original owner must remove
accretion for 50 years subjected said accretion to or take back his known and identifiable chunk of
acquisition through prescription by third persons. land within two years; otherwise, he will lose
(Reynante v. CA, GR No. 95907,1992) ownership over it and the law will transfer ownership
to the owner of the land upon which the chunk of
The rules on alluvion do not apply to man-made or land is found. (Art. 459)
artificial accretions to lands that adjoin canals or
esteros or artificial drainage system. (Ronquillo v. What are Uprooted Trees?
CA, GR No. L-43346, 1991) Trees uprooted and carried away by the current of
the waters (Art.460)
Lands added to the shores by accretions and
alluvium deposits caused by the action of the sea, What are the Rules Regarding Uprooted Trees?
form part of the public domain. When they are no The uprooted trees must be claimed by the original
longer washed by the waters of the sea and are not owner within six months; otherwise, he will lose
necessary for the purposes of public utility, or for the ownership and the law will transfer ownership to the
establishment of special industries, or for the owner of the land upon which the uprooted trees are
coastguard service, the Government shall declare found.
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up river beds should belong to some other person.

Note: The law only requires the original owner to (Republic vs. Santos III, GR No. 160453, 2012)
claim the uprooted trees within six months, unlike a
chunk of land which the law requires the original b. For Movables
owner to remove or take it back within two years to
retain ownership. Adjunction/ Conjunction
Change in the Course of Rivers What is the definition of Adjunction or

Conjunction?
What are the Requisites of Change in the Course It is the process whereby two (2) movable things
of Rivers? owned by different persons are joined together
1. There must be a natural change in the course without bad faith, in such a way that they form a
of the waters of the river. single object. (Art. 466)
2. The change must be abrupt or sudden. (Art.
461) What are the Requisites of
Adjunction/Conjunction? (SID)
What are the Rights Of Owner of Land Occupied 1. The two things belong to Different owners.
by New River Course? 2. They form a Single object.
1. Right to old bed ipso facto in proportion to area 3. They are Inseparable; that their separation
lost; would impair their nature or result in substantial
2. Owner of adjoining land to old bed: right to injury to either component. (Paras, supra, p.
acquire the same by paying its value – Value 265)
not to exceed the value of area occupied by new
bed. (Art. 461) What are the Classes of Adjunction? (ISTEP)
1. Inclusion (engraftment)
What is considered as New Riverbanks? 2. Soldadura (soldering)
Whenever a river, changing its course by natural a. Feruminatio – same metal
causes, opens a new bed through a private estate, b. Plumbatura – different metals
this bed shall become of public dominion. (Art.462) 3. Tejido (weaving)
4. Escritura (writing)
New riverbed may itself be abandoned, due to 5. Pintura (painting) (Paras, supra, p. 291)
natural or artificial causes authorized by law.
General Rule: The owner of the principal thing
Owners will get back this previous property if the acquires the accessory, indemnifying the former
course of the river reverts to its original place. owner for its value. (Art. 466)
(Sanchez v. Pascual, 11 Phil. 395, 1969)
What is the Test To Determine Principal?
What are the Islands Belonging to the State The principal thing is deemed to be that to which the
Islands, which may be formed: other has been united as an ornament, or for its use
1. On the seas within the jurisdiction of the or perfection. (Art. 467.)
Philippines;
2. On lakes; and If it cannot be determined: (Rule of importance and
3. On navigable or floatable rivers. (Art.464) purpose)
1. Greater value = If they are of unequal value
What are Islands Formed in Non-Navigable or 2. Greater volume = If they are of equal value
Non-Floatable Rivers? 3. Greater merits (Art. 467 & 468)
1. Belong to the owners of the margins or banks of When is Separation Allowed?
the river nearest to each of them. 1. Separation without injury (Art.469)
2. If in the MIDDLE of the river – divided 2. Separation with injury – accessory is much
longitudinally in halves (Art.465) more precious than the principal; the owner of
the former may demand its separation even
Note: Riverbeds that dry up continue to belong to though the principal may suffer injury. (Art.469)
the State as its property of public dominion, unless 3. Owner of principal in bad faith. (Art.470 (2))
there is an express law that provides that the dried-
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What are the Rules as to Ownership?

OWNER OF OWNER OF ACCESSORY What is the definition of Specification?
PRINCIPAL (OP) (OA) Imparting of a new form to the material belonging to
GOOD FAITH / GOOD FAITH another; or the making of the material of another into
BAD FAITH a thing of a different kind. (Art. 474)
Acquires the May demand separation:
accessory If no injury will be caused What can be done when a Worker is in Good
- indemnifies the If value of accessory is Faith?
former owner for greater than principal - One who, in good faith, employs the material of
its value even if damages will be another in order to make a thing of a different kind
caused to principal shall appropriate the thing transformed as his own,
(expenses is to the one indemnifying the owner of the material for its value.
who caused the (Art. 474)
conjunction)
GOOD FAITH BAD FAITH What may be done when the Material is of
Owns the Loses the thing Greater Value Than the Transformed Thing?
accessory incorporated The owner of the material may:
Right to damages Indemnify the OP for the 1. Appropriate the new thing to himself, after
damages OP may have paying indemnity for the value of the work; or
suffered 2. Demand indemnity for the material. (Art. 474)
BAD FAITH GOOD FAITH
Pay OA value of Right to choose between What may be done when the Worker is in Bad
accessory or OP paying him its value or Faith?
principal and That the thing belonging to The owner of the material shall have the right to:
accessory be him be separated even 1. Appropriate the work to himself, without paying
separated though it be necessary to anything to the worker; or
PLUS destroy the principal thing 2. Demand of the latter that he indemnifies him for
Liability for the value of the material and the damages he
damages may have suffered. (Art. 474)
Note: The owner of the material cannot appropriate
What is mixture? the work in case its value, for artistic or scientific
Takes place when two or more things belonging to reasons, is considerably more than that of the
different owners are mixed or combined to such material. (Art. 474)
extent that the components lose their identity. (Art.
472) What are the differences among adjunction,
mixture and specification?
What are its Kinds? ADJUNCTION MIXTURE SPECIFICATION
1. Commixtion – mixture of solid things Involves at least Involves at Involves at least
2. Confusion – mixture of liquid things 2 things least 2 things 2 things
As a rule, As a rule, co- As a rule,
What are the Rules? accessory ownership accessory
1. Mixture by the will of the owners follows principal results follows principal
a. Rights governed by stipulations The things joined May either The new object
b. Without stipulation: each acquires a right or retain their retain or lose retains or
interest in proportion to the value of his nature respective preserves the
material. (Paras, supra, p. 297) natures nature of the
2. Mixture caused by an owner in good faith or by original object
chance
a. Each share shall still be in proportion to the
value of their thing (Santos v. Bernabe, 54
Phil. 19, 1929)
3. Mixed caused by owner in bad faith
a. The actor forfeits his thing;
b. Liable for damages. (Paras, supra, p. 297)
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c. Rights of Builder/Planter/Sower in Good Faith
What are the rules when landowner (LO), builder/planter/sower (BPS) and owner of materials (OM) are 3
different persons?
Landowner (LO) Builder/Planter/Sower (BPS) Owner of the Materials (OM)

A. Good faith Good Faith Good Faith
Option 1: To acquire To receive payment for the value of To receive payment from BPS who
whatever has been built, the land and necessary, useful and is primarily liable for materials; if
planted or sown and payment luxurious expenses (if LO wants to BPS is insolvent, to proceed against
of the necessary expenses, get luxurious improvements) with LO who is subsidiarily liable with no
useful expenses and right of retention without any right of retention.
luxurious expenses (if the LO
obligation to pay rent until full
wants to get the luxurious
improvements) payment.
To remove the useful

improvements provided it does not
cause injury (this is part of right of
retention).
If LO does not get the luxurious

improvements, BPS can remove
the same provided there is no
injury to the land or the building.
Option 2: To oblige the BP to To purchase land at fair market To receive payment from BPS only
buy the land or the S to pay value provided its value is not with right of retention and material
rent unless the value of the considerably morethan that of the rent lien until fullpayment. LO is not
land is considerably more building or trees. subsidiarily liable.
than that of the building or
trees. If BP cannot pay purchase price
of the land or the S cannot pay
the rent, LO can require BPS to
remove whatever has been built,
planted or sown.
If the value of land isconsiderably

more than that of the building or
trees, BPS cannot be compelled
to buy the land. In such case,
BPS will pay reasonable rent.
If BPS cannot pay the rent, LOcan

eject BPS from the land.
B. Good Faith Good Faith Bad Faith
Same as A. Same as A. Whatever is the choice of LO,the OM
will lose materials without payment
plus liable for damages.
C. Good Faith Bad Faith Good Faith
Option 1: To acquire BPS will lose whatever has been To receive payment for value of
whatever has been built, built, planted or sown but is materials principally from BPS; and
planted or sown for free entitled to be paid for necessary if BPS is insolvent,subsidiarily from
except for necessary expenses and luxurious LO.
expenses and luxurious expenses (if LO wants to acquire
expenses (if LO wants to luxurious improvements) plus
acquire luxurious liable to pay damages.
improvements) plus
damages. BPS has no right of removal even
if removal will not causeinjury.
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Option 2: To oblige BP to buy To buy the land regardless To receive payment for materials
the land regardless whether whether the value of the land is from BPS only.
the value of the land is considerably more than thatof the
considerably more than that building or the trees or pay rent
of the building or the trees or and liable to pay damages
S to pay rent plus damages.
Option 3: To oblige BPS to To demolish or remove what has To receive payment for materials
demolish or remove whatever been built, planted or sowed and from BPS only.
has been built, planted or liable for damages.
sowed plus damages.
D. Good Faith Bad Faith Bad Faith
Same as C. Same as C. Since both BPS and OM are inbad
faith, treat them both as if they are in
good faith.
Whatever is the choice of the LO,

OM has right to receive payment for
materials from BPS only (LO has no
subsidiary liability because OM is in
good faith only insofar as BPS is
concerned).
If LO chooses option 1, OM has no

right to remove materials even if
there will beno injury.
If LO chooses option 2, OM has right

of removal providedthere will be no
injury.
If LO chooses option 3, OM isliable

to pay damages due to defects or
inferior quality of materials.
E. Bad Faith Good Faith Good Faith
To pay for whatever has been Option 1: To receive payment for To receive payment for value of
built, planted or sown plus whatever has been built, planted materials principally from BPS; and
liable to pay damages. or sown plus damages. if BPS is insolvent,subsidiarily from
LO.
Option 2: To remove whatever
has been built, planted or sown
even if it will cause injury plus
damages.
BPS has no option to acquireor

buy the land.
F. Bad Faith Good Faith Bad Faith
Same as E. Same as E. No right to receive payment for
materials from BPS nor LO (who
ends up owning the buildings or
trees).
Note: This chart is from Atty. Francis H. Ampil
A lessee cannot be a builder in good faith. He is (Frederico Geminiano, et al. v. CA, et al., GR No.
estopped to deny his landlord’s title, or to assert a 120303, 1996)
better title not only in himself, but also in some third
person while he remains in possession of the leased Estoppel applies even if the lessor had no title at the
premises and until he surrenders possession to the time. The relation of lessor and lessee was created
landlord. (Munar v. CA, GR No. 100740, 1994); and may be asserted not only by the original lessor,
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but also by those who succeed to his title. As lessees, in good faith. After such annotation, P can no longer
they knew that their occupation of the premises invoke the rights of a builder in good faith. Should E
would continue only for the life of the lease. They opt to appropriate the improvements made by P, it
cannot be considered as possessors nor builders in should only be made to pay for those improvements
good faith. (Racaza v. Susan Realty, Inc., GR No. L- at the time good faith existed to be pegged at its
20330, 1966); (Vda. De Bacaling v. Laguna, GR No. current market value. (Carrascoso v. CA, GR No.
L-26694, 1973); (Santos v. CA, 221 SCRA 42, 1993) 123672, 2005)
Even if the lessor promised to sell, it would not make The party asserting the status of builder in good faith,
the lessee possessor or builder in good faith so as to must substantiate their claim through preponderance
be covered by the provisions of Art. 448 of the NCC, of evidence. (Padilla, Jr. v. Malicsi, G.R. No. 201354,
if he improves the land. The latter cannot raise the 2016)
mere expectancy of ownership of the land because
the alleged promise to sell was not fulfilled nor its Q: On July 2, 2012, Spouses X sent Spouses Y a
existence even proven. (Jurado, Civil Law Reviewer, letter requiring the latter to vacate the property
2008) within 30 days from receipt of the letter. Spouses
Y refused to comply. After unsuccessful
The owner of the land on which a building has been barangay conciliation proceedings, Spouses X
built in good faith by another has the option to buy the filed a complaint for unlawful detainer and
building or sell his land to the builder, he cannot damages against Spouses Y. Spouses X alleged
refuse to exercise either option. (Sarmiento v. Agana, that they are the owners of the 28,772 sqm. lot
GR No. L-57288, 1984) and that they only allowed Spouses Y to possess
the lot since they were close relatives and
Note: For lessees, do not apply the rules on BPS. subject to the condition that they would vacate
Apply Art. 1678 which states: If the lessee makes, the same upon demand. On the other hand,
in good faith, useful improvements which are suitable Spouse Y claimed that in 1979, the subject
to the use for which the lease is intended, without property was purchased by the mother of Mr. X
altering the form or substance of the property leased, and Mrs. Y. but the former, however, allegedly
the lessor, upon termination of the lease shall pay the succeeded in registering the property solely in
lessee one-half of the value of the improvements at his name. Hence, an implied trust was allegedly
that time. Should the lessor refuse to reimburse said created over the undivided hereditary share of
amount, the lessee may remove the improvements, Mrs. Y. For over 34 years, Spouses Y alleged that
even though the principal thing may suffer damage they possessed and cultivated the lot in the
thereby. With regard to ornamental expenses, the concept of an owner, believing in good faith that
lessee shall not be entitled to any reimbursement, but they were co-owners of the subject lot. In the
he may remove the ornamental objects, provided no course of their possession, they allegedly
damage is caused to the principal thing, and the introduced various improvements thereon by
lessor does not choose to retain them by paying their planting bamboos, nipa palms and coconut trees,
value at the time the lease is extinguished. and by constructing fishponds. Spouses Y
Owner of the land on which improvement was built by further claimed that Spouses X failed to
another in good faith is entitled to removal of personally appear during the barangay
improvement only after landowner chose to sell the conciliation proceedings and that their
land and the builder refused to pay for the same. representative, Z, had no authority to appear on
Where the land’s value is greater than the their behalf. MTC ordered Spouses Y to vacate
improvement, the landowner cannot compel the the property and to pay nominal rent until the
builder to buy the land. A “forced lease” is then property is fully returned. MCTC held that
created and the court shall fix the terms thereof in although Spouses Y claimed that Spouses X
case the parties disagree thereon. (Depra v. Dumlao, failed to personally appear during the mandatory
GR No. L-57348, 1985) barangay conciliation proceedings, the Office of
the Punong Barangay nevertheless issued a
The right to choose between appropriating the Certification to File Action in accordance with
improvement or selling the land on which the Section 412 of R.A. No. 7160. Further, the case
improvement of the builder, planter or sower stands, was referred to Philippine Mediation Center
is given to the owner of the land (not the court) (PMC) during pre-trial but the parties still failed to
(Ballatan v. CA, GR No. 125683, 1999) amicably settle the same.
RTC and CA just reiterated MTC’s decision. Are
Improvements made prior to the annotation of the Spouses Y builders in good faith under Article
notice of lis pendens are deemed to have been made 448 and thus have a right to retain the subject lot
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until payment of necessary useful and luxurious 4. Singular/Particular–over particular/ specific

expenses? thing
A: Yes. While Supreme Court ruled that Spouses Y 5. Incidental – exists independently of the will of
have no the right to retain the subject lot under Article the parties
448 as they were aware that their tolerated 6. Universal – over universal things (co-heirs
possession could be terminated at any time and thus
7. Contractual- created by contract
they could not have built on the subject property in
the concept of an owner, CA and the lower courts
overlooked the fact that Spouses Y constructed 3. RIGHTS OF CO-OWNERS
improvements on the subject lot with the knowledge
and consent of Spouses X. In exceptional cases, the a. Ownership Over Whole Property
Court has applied Article 448 to instances where a
builder, planter, or sower introduces improvements b. Sale / Alienation
on titled land if with the knowledge and consent of the
owner. While Spouses X merely tolerated Spouses a) Individual Interest
Y’s possession, the former never denied having Right to alienate, assign or mortgage own part;
knowledge of the fact that the latter possessed,
except personal rights like right to use and habitation
cultivated and constructed various permanent
improvements on the subject lot for over 34 years.
(Spouses Belvis v. Spouses Erola, G.R. No. 239727, A co-owner cannot give valid consent to another to
July 24, 2019) build a house on co-owned property as such an act
would be tantamount to making an alteration in the
C. CO-OWNERSHIP thing owned in common. Entry into the land without
the knowledge of the other co-owners can be
1. CHARACTERISTICS OF CO- categorized as possession by stealth and W’s act of
OWNERSHIP getting only the consent of one co-owner can be
considered as “strategy.” Thus, it would be a case of
What is Co-Ownership? forcible entry. (Cruz v. Catapang, GR No. 164110,
It is a form of ownership, which exists whenever an 2008)
undivided thing or right belongs to different persons.
(Art. 484) b) Entire Property
Any co-owner may file an action under Article 487 not
What are the Elements of Co-ownership? (PUI)
only against a third person but also against another
1. Plurality of subjects – many owners co-owner who takes exclusive possession and
2. Object of ownership must be Undivided asserts exclusive ownership of the property. (De
3. Recognition of Ideal shares; no one is an owner Guia vs. CA, GR No. 120864, 2003)
of a specific portion of the property until it is
partitioned. A co-owner can sell an undivided part of the property
co-owned, but its validity is limited to his share.
2. SOURCES OF CO-OWNERSHIP Hence, there is no need for consent of the other co-
owners as to said sale. (Arambulo v. Nolasco, GR
How is Co-ownership Created? (C-FOLDS) No. 189420, 2014) Same rule applies in a mortgage
1. Law by a co-owner of his share. (Rural Bank of
2. Contracts Cabadbaran v. Nulecio-Yap, GR No. 178451, 2014)
3. Succession
4. Fortuitous event/chance (i.e., commixtion) According to Art. 493 of the Civil Code, “each co-
5. Occupancy (i.e.,2 persons catch a wild animal) owner shall have the full ownership of his part and of
6. Donation the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, xxx, except
when personal rights are involved. But the effect of
What are the Kinds of Co-ownership?
the alienation or the mortgage, with respect to the co-
1. Ordinary – right of partition exists owners, shall be limited to the portion which may be
2. Compulsory– no right of partition exists (party allotted to him in the division upon the termination of
wall) the co-ownership.” Hence, the effect of the alienation
3. Legal – created by law or the mortgage with respect to the co-owners, shall
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be limited, by mandate of the same article, to the physical adjudication. (Cabrera v. Ysaac G.R. No.
portion which may be allotted to him in the division 166790, 2014)
upon the termination of the co-ownership. A co-
owner has no right to sell or alienate a concrete, d) Prescription
specific, or determinate part of the thing in common
to the exclusion of the other co-owners because his
General Rule: A co-owner cannot acquire the
right over the thing is represented by an abstract or
whole property as against the other co-owners by
ideal portion without any physical adjudication. (Ulay
acquisitive prescription. (Art. 494)
v. Bustamante, GR 231721 & 231722)
Exception: When there is valid repudiation –
c) Redemption by Other Co-owners prescription shall start from such repudiation. (Paras,
supra, p. 365)
What is the Right of Redemption?
The right of redemption is the right of a co-owner to Exception to the Exception: In constructive
recover or get back any share or interest sold by trusts, prescription does not run. (Jacinto v. Jacinto,
another co-owner to a stranger or third party. It is an L-17955, L-17957, 1962) (Paras, supra, p. 366)
act of preservation for the benefit of all co-owners.
Therefore, the co-owner who redeems during the While the husband is the recognized administrator of
redemption period may demand reimbursement from the conjugal property under the Civil Code, there are
other co-owner who redeems during the redemption instances when the wife may assume administrative
period may demand reimbursement from other co- powers or ask for the separation of property. Where
owners the latter’s share in the redemption price or the husband is absent and incapable of administering
cost of redemption. the conjugal property, the wife must be expressly
authorized by the husband or seek judicial authority
Note: To be exercised within 30 days from written to assume powers of administration. Thus, any
notice of sale of undivided share of another co-owner transaction entered by the wife without the court or
to a stranger. the husband’s authority is unenforceable. Being an
unenforceable contract, the 2nd Contract is
Redemption of the whole property by a co-owner susceptible to ratification. The husband continued
does not vest in him sole ownership over said remitting payments for the satisfaction of the
property. Redemption within the period prescribed by obligation under the questioned contract. These acts
law by a co-owner will inure to the benefit of all co- constitute ratification of the contract. (Fabrigas v. San
owners. Hence, it will not put an end to existing co- Francisco, GR No. 152346, 2005)
ownership. (Mariano v. CA, GR No. L-51283, 1989)
What are the elements of Benefits/ Fruits/
Co-owners have the right to alienate their pro indiviso Interest/ Income?
shares even without the knowledge or consent of
another co-owner as long as the alienation covers a) Right to benefits proportional to respective
only their shares interests in the common property. interest
Under the NCC, each co-owner “shall have the full b) Stipulation to contrary is void
ownership of his party and may therefore alienate it.” c) Right to full ownership of his part and fruits. (Art.
The effect, however, of the alienation with respect to 493)
the co-owners shall be limited only to the portion
which may be allotted to him in the division upon the What are the elements Use/ Possession?
termination of the co-ownership. (Tabasondra v. a) Right to use thing co-owned
Constantino, GR No. 196403, 2016) b) For purpose for which it is intended
c) Without prejudice to interest of ownership
A co-owner has no right to sell or alienate a concrete, d) Without preventing other co-owners from making
specific or determinate part of the thing owned in use thereof. (Art. 486)
common, because his right over the thing is
represented by quota or ideal portion without any
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What are the rights when it comes to 2. Positive acts of repudiation have been made
Management/Administration? Known
a) Right to change purpose of co-ownership by 3. Evidence is clear and conclusive
agreement. (Art. 486) 4. Open, continuous, exclusive, notorious
b) Right to bring action in ejectment in behalf of possession.
other co-owner. (Art. 487) (Santos v. Heirs of Crisostomo, 41 Phil. 342, 1921)
c) Right to compel co-owners to contribute to
necessary expenses for preservation of thing Q: A filed a complaint for partition of 8 parcels of
and taxes. (Art. 488) land against B. TCTs all indicate that A and B are
d) Right to exempt himself from obligation of paying co-owners of the properties. A based his right
necessary expenses and taxes by renouncing under Article 494 of the New Civil Code. B alleged
that while the TCTs reflected A’s name, he was
his share in the pro indiviso interest; but can’t be
not a co-owner because he never contributed to
made if prejudicial to co-ownership. (Art. 488) the acquisition and for the maintenance or taxes
e) Right to make repairs for preservation of things; of the property. Is A entitled to the partition of the
can be made at will of one co-owner; receive property.
reimbursement therefrom; notice of necessity of A: Yes. A is a co-owner. Public documents pointing
such repairs must be given to co-owners, if to the existence of co-ownership carry with it the legal
practicable. (Art. 489) presumption of regularity, thus the opposing party
f) Right to ask for partition anytime. (Art. 494) has the burden of proving with clear, convincing and
g) Right of pre-emption persuasive evidence to repudiate the co-ownership.
Here, eight certificates of title all clearly and
unequivocally identify petitioner A as one of the co-
4. TERMINATION OF CO-OWNERSHIP owners of the subject properties. In land registration,
the certificate of title serves as evidence of an
PARTITION indefeasible and incontrovertible title to the property
in favor of the person whose name appears therein.
General Rule: Demandable Anytime It is the best proof of ownership of a parcel of land.
No co-owner shall be obliged to remain in the co- Further, one's assertion of ownership is further
ownership. Each co-owner may at any time demand strengthened and buttressed by the fact of
possession coupled with the lack of opposition to
the partition of the thing owned in common, insofar
such possession. Here, A possesses a portion of the
as his share is concerned. (Art. 494) subject property with no opposition by the other
parties, aside from B, who disclaimed petitioner A’s
Exception: A co-owner may not successfully status as co-owner only after more than two decades
demand a partition: (UNLAD) since the execution of the Deed of Absolute Sale, and
1. If by Agreement (for a period not exceeding 10 only as a mere reaction to the Complaint for Partition
years, renewable) partition is prohibited. (Art. filed by A.
Assuming for argument's sake that A did not
494)
contribute in the payment of the purchase price of the
2. When partition is prohibited by a Donor or
subject properties, it does not necessarily mean that
testator (for a period not exceeding 20 years) – he could not become a co-owner of the subject
from whom the property came. (Art. 494) properties who can compel partition. According to
3. When partition is prohibited by Law. (Art. 494) Sec. 1, Rule 69 of the Rules of Court, in relation to
4. When a physical partition would render the Articles 484 and 488 of the Civil Code, a person may
property Unserviceable, but in this case, the exercise the right to compel the partition of real estate
property may be allotted to one of the co-owners, if he/she sets forth in his/her complaint the nature and
who shall indemnify the others, or it will be sold, extent of his title and subsequently proves the same.
and the proceeds distributed. (Art. 495) The law does not make a distinction as to how the co-
owner derived his/her title, may it be through gratuity
5. When the legal Nature of the common property
or through onerous consideration. (Logrosa v. Sps.
does not allow partition
Azares, G.R. No. 217611, March 27, 2019)
What are the Requisites of Repudiation? (UKEO)

1. Unequivocal acts of repudiation of the co-
ownership amounting to an ouster of the other co-
owners
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What are the consent requirements for co-owners rights belonging to them before partition was
in acts of preservation, acts of administration and made. (Art. 499)
acts of alteration?
1. Share in charges proportional to respective
CONDOMINIUM ACT (RA No. 4726)
interest; stipulation to contrary is void. (Art. 485)
2. Pay necessary expenses and taxes – may be
What is a Condominium?
exercised by only one co-owner. (Art. 490)
It is an interest in real property consisting of a
3. Pay useful and luxurious expenses – if
separate interest in a unit in a residential,
determined by majority
commercial, or industrial building and an undivided
4. Duty to obtain consent of all if thing is to be altered
interest in common, directly or indirectly, in the land
even if beneficial; resort to court if non-consent is
on which it is located and in other common areas of
manifestly prejudicial. (Art. 491)
the building.
5. Duty to obtain consent of majority with regard to
administration and better enjoyment of the thing;
Any transfer or conveyance of a unit or an apartment
majority means majority in the interest not in the
office or store or other space therein shall include the
number of co-owners; court intervention if
transfer and conveyance of the undivided interest in
prejudicial – appointment of administrator. (Art.
the common areas or in a proper case, the
492)
membership or shareholdings in the condominium:
6. No prescription to run in favor co-owner as long
provided however, that where the common areas in
as he recognizes the co-ownership; (Art. 494)
the condominium project are held by the owners of
Note: For acquisitive prescription to run in favor separate units as co-owners thereof, no
of a co-owner, the requisites are: condominium unit therein shall be conveyed or
a) He must have repudiated the co- transferred to persons other than Filipino citizens or
ownership through unequivocal acts; corporations at least 60% of the capital stock of which
b) Such act of repudiation is made known to belong to Filipino citizens, except in cases of
other co-owners hereditary succession.
c) Evidence must be clear and convincing
7. Co-owners cannot ask for physical division if it General Rule: Common areas shall remain
would render thing unserviceable; but can undivided, and there shall be no judicial partition
terminate co-ownership. (Art. 495) thereof
8. After partition, duty to render mutual accounting
of benefits and reimbursements for expenses. What are the Exceptions?
(Art. 500) 1. When the project has not been rebuilt or repaired
9. Each co-owner has full ownership of his part and substantially to its state prior to its damage or
of the fruits and benefits pertaining thereto, and destruction 3 years after damage or destruction
he may alienate, assign, or mortgage the portion which rendered a material part thereof unfit for
which may be allotted to him upon the termination use;
of the co-ownership. It appears that while there is 2. When damage or destruction has rendered ½
a single certificate of title, the three lots are or more of the units untenable and that the
distinguishable from each other. (Art. 493) condominium owners holding more than 30%
interest in the common areas are opposed to
What are the rights and obligations at the end or restoration of the projects;
termination of the co-ownership or upon 3. When the project has been in existence for
partition? more than 50 years, and the condominium
1. Creditors of assignees may take part in division owners holding in aggregate more than 50%
and object if being effected without their interest in the common areas are opposed to
concurrence but cannot impugn unless there is restoration, remodeling or modernizing;
fraud or made notwithstanding their formal 4. When a project or a material part thereof has
opposition. (Art. 497) been condemned or expropriated and the
2. Non-intervenors – retain rights of mortgage and project is no longer viable or that the
servitude and other real rights and personal condominium owners holding in aggregate
more than 70% interest in the common areas
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are opposed to the continuation of the Ex. possession of a thief

condominium regime. 2. Possession with juridical title (juridical
5. When conditions for partition by sale set forth in possession); juridical relation exists between the
the declaration of restrictions duly registered possessor and the owner
have been met.
Ex. that of a lessee, pledge, depositary,
usufructuary
D. POSSESSION
3. Possession with just title but not from true owner,
such that of a possessor in good faith (possessory
1. CHARACTERISTICS
right)
What is possession? Ex. When a buyer acquires a thing from the
Possession is the holding of a thing or enjoyment of seller who was not the true owner or could
a right. (Art. 523) not transmit rights.
4. Possession with title in fee simple or
What are the viewpoints of Possession possession with title of dominion
1. Right TO possession (jus possidendi) - This is the highest degree of
Possession de facto - right or incident of possession.
ownership
How is possession acquired from the viewpoint
2. Right OF possession (jus possessionis)
of a possessor?
Possession de jure – this is an independent
right of itself, independent of ownership 1. Personal
a. Intent to possess
b. Capacity to possess
What are the elements of possession? (OIR)
c. Object must be capable of being possessed
1. Occupancy or control of the thing or right – actual 2. Through authorized person (agent or legal
or constructive (corpus) representative)
2. Intent to Possess (animus possidendi) a. Intent to possess for principal (not for agent)
3. Must be by virtue of one’s own Right b. Authority or capacity to possess (for another)
c. Principal has intent and capacity to possess
What is the extent of possession? 3. Through Unauthorized person (but only if
1. Physical/actual – occupancy in fact of the whole subsequently ratified)
or at least substantially the whole a. Intent to possess for another (the principal)
2. Constructive – occupancy in part in the name of b. Capacity of “principal” to possess
the whole under such circumstances that the law c. Ratification by principal
extends the occupancy to the possession of the
whole
2. KINDS OF POSSESSION
What is the subject of possession? What are the kinds of possession?

General Rule: Subject of possession are things or 1. Possession in the concept of an owner (Adverse
rights which are susceptible of being appropriated Possession) – possession by the owner himself
(Art.530) or adverse possessor
2. Possession in the concept of holder – possessor
Exceptions: acknowledges that another is an owner (e.g.,
1. Res communes usufruct, lessee, depositary, bailee in
2. Property of public dominion commodatum)
3. Discontinuous servitudes 3. Possession In one’s own name – personal
4. Non-apparent servitudes acquisition
5. Things specifically prohibited by law 4. Possession in the name of another – agent;
subject to authority and ratification if not
What are the degrees of possession? authorized; negotiorum gestio
a) Voluntary – as when an agent possesses
1. Possession without title and in violation of right
for the principal (by virtue of agreement)
of owner (grammatical degree)
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b) Necessary – as when a mother possesses What is a possessor in good faith?

for a child still in the maternal womb Possessor in Good Faith is one who is not aware
c) Unauthorized – this will become the that there exists a flaw in the title or mode which
principal’s possession only after there has invalidates it. (Art. 526)
been a ratification without prejudice to the
effects of negotiorum gestio What is a possessor in bad faith?
5. Possession in good faith – not aware of any flaw Possessor in Bad Faith is one who is aware of
or defect in his title or mode of acquisition defect. (Art. 526)
6. Possession in bad faith – aware that there exists
in his title or mode of acquisition some flaw or When does bad faith begin?
defect A possessor in good faith may become possessor in
bad faith when he becomes aware of the flaw in his
What are the effects of possession in the concept title or mode of acquisition.
of an owner?
What is the basis of good faith?
1. May be converted into ownership through
Mistake upon a doubtful/difficult question of law may
acquisitive prescription
be the basis of good faith (Art. 526; Kasilag v.
- Movables: 4 or 8 years
Rodriguez, GR No. 46623, 1939)
- Immovables:10 or 30 years
o Imprescriptible when there is
Who has the burden of proof to prove bad faith?
Torrens certificate title over land
Good faith is always presumed. Burden of proof lies
2. Bring actions necessary to protect possession;
on the one alleging bad faith. The belief must be a
3. Ask for inscription of possession;
reasonable, not capricious, one.
4. Demand fruits and damages from one unlawfully
detaining property.
Possession is presumed to be enjoyed in the same
character in which it is acquired, until contrary is
Note: Possessor in the concept of owner has in
proven. (Art. 527)
his favor the legal presumption that he
possesses with just title. Burden of proving just
What is the difference between a possessor in
title is on the plaintiff who seeks the recovery of
good faith and a possessor in the concept of an
property. (Art. 541)
owner?
While the possessor in good faith is the one who
What are the requisites for personal acquisition? believes he is the owner, the possessor in the
1. Must have capacity to acquire possession; concept an owner is one who acts as if he is the
2. Intent to possess; owner.
3. Possibility to acquire possession.
3. ACQUISITION OF POSSESSION
What is the difference between possession and
ownership? What are the ways of acquiring possession?
Possession and ownership are distinct legal Possession is acquired in any of the following ways:
concepts. Ownership confers certain rights to the 1. By the material occupation of the thing or the
owner, among which are the rights to enjoy the thing exercise of a right;
owned and to exclude other persons from possession 2. By the fact that the property is subject to the
thereof. On the other hand, possession is defined action of one’s will; and
as the holding of a thing or the enjoyment of a 3. By the proper acts and legal formalities
right. Literally, to possess means to actually and established for acquiring the right. (Republic v.
physically occupy a thing with or without a right. Ng, G.R. No. 182449, 2013)
Thus, a person may be declared an owner, but he
may not be entitled to possession. (Heirs of Roman
How is possession acquired by material
Soriano v. CA, GR No. 128177, 2001)
occupation or exercise of a right?
a. Traditio Brevi Manu – when one already in
possession of a thing by a title other than
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ownership continues to possess the same Effects of possession in good faith is counted only
under a new title, that of ownership from the date of the decedent’s death (Art. 534)
b. Constitutum Possessorium—when the
owner continues in possession of the What is the rule regarding minors acquiring
property alienated not as owner but in some possession?
other capacity. 1. May acquire material possession but not right to
Note: Be careful with spelling in the bar exam. possession;
2. May only acquire them through guardian or legal
How is possession acquired by subjection of the representatives (Art. 535)
thing or right to our will?
a. Traditio Longa Manu – effected by mere Acquisition – Possession cannot be acquired
consent or agreement of the parties through force or intimidation. A possessor who
b. Traditio Simbolica – effected by delivering objects must resort to the courts.
an object (e.g., key) symbolizing the placing
of one thing under the control of the vendee What is jus vindicandi?
Jus vindicandi is the right to recover. The law
How is possession acquired by constructive provides that the owner has a right of action against
possession or proper acts and legal formalities the holder and possessor of the thing in order to
established for acquiring such right of recover it. (Art. 428)
possession?
What are the invalid ways to acquire possession?
a. succession,
Possession cannot be:
b. donation,
c. execution of public instruments (Paras, 1. Acquired through force or intimidation as long as
supra) there is a possessor who objects thereto; (Art.
536)
2. Affected by acts merely tolerated; or
How is possession acquired through
3. Clandestine and unknown acts; or
succession?
4. Acts of violence (Art. 537)
Possession of hereditary property:
1. If accepted – deemed transmitted without
What are tolerated acts?
interruption from moment of death
Tolerated Acts – acts of little disturbances which a
2. If not accepted (if the heir refuses or is
person, in interest of neighborliness or friendly
incapacitated to inherit) – deemed never to have
relations, permits others to do on his property, such
possessed the same. (Art. 533)
as passing over the land, tying a horse, or getting
some water from a well. (Department of Education v.
What are the effects of bad faith of decedent on Casibang, GR No. 192268, 2016)
the heir/s?
General Rule: Heir shall not suffer the
The execution of a deed of sale is merely a prima
consequences of the wrongful possession of the
facie presumption of delivery of possession of a piece
decedent (bad faith is personal)
of real property, which is destroyed when the delivery
Exception: When he becomes aware of the flaws
is not effected because of a legal impediment. Said
affecting the decedent’s title
construction or symbolic delivery, being merely
presumptive, may be negated by the failure of the
Note: It doesn’t matter whether the “facts” which
vendee to take actual possession of the land sold.
show that the possessor is not unaware that he
(Copuyoc v. De Sola, GR No. 151322, 2006)
possesses thing properly/improperly is caused by
him or by some other person
4. EFFECTS OF POSSESSION
Interruption of good faith may take place at:
What are the rights of legal possessor?
1. The date of summons; or
Right to be respected in his possession; if disturbed,
2. That of the answer if the date of summons
he shall be protected or restored by means
does not appear. established by laws.
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What are the legal presumptions in favor of 3. Possession of real property presumes that
possessor? movables are included (Art. 542)
1. Possessor who recovers possession unjustly 4. Co-possessor deemed to have exclusively
lost shall be deemed to have enjoyed it without possessed part which may be allotted to him;
interruption. (Art. 561) This is important for interruption in whole or in part shall be to the
purposes of acquisitive prescription. prejudice of all (Art. 543)
2. Legal presumption of just title (prima facie) and
he is not obliged to show or prove it (Art. 541)
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RULES ON FRUITS
Kinds of Fruits Possessor in Good Faith Possessor in Bad Faith
1. Civil Fruits Entitled to fruits from start of Not entitled to fruits.

possession until legal interruption.
Must pay damages as rental from time
possession started until possession
is finally defeated.
2.Natural/Industrial
Fruits
a. Gathered Right to retain fruits. Must account for fruits and return value
of: (i) fruits actually received and
(ii) fruits which the legal possessor
could have received with due care
and diligence.
Must pay damages as reasonable rent

for the term of possession.
But entitled to necessary expenses for

preservation, cultivation and gathering
of the fruits.
b. Pending Owner has 2 options:
Option 1: Pro-rating (based on No rights, not even reimbursement of

period of possession) between expenses for cultivation (because
possessor and owner of: (i) by right of accession, all fruits belong to
expenses; (ii) net harvest; and owner without need to pay indemnity).
(iii) charges.
Must pay damages as reasonable rent
Option 2: To allow possessor to for the term of possession.
stay in possession until after
all fruits are gathered (which shall
serve as the indemnity for
expenses).
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What is possession as a fact?

2. Useful Owner has 2 No rights.
Possession as a fact cannot be recognized at the
Expenses options:
same time in two different personalities (Art. 538)
Option 1:
What are the exceptions? Reimbursem
1. Co-possessor – there is no conflict of interest, ent of either
both of them acting as co-owners, as in the case (i) amount
of property owned or possessed in common spent or (ii)
2. Possession of different concepts or different increase in
degrees value with
right of
retention until
What are the rules in case of conflict or dispute full payment.
regarding possession?
1. Present possessor shall be preferred Option 2: To
2. If there are 2 possessors, the one longer in allow posses
possession sor to
3. If the period of possession is the same, the one remove prov
ided no
who presents oldest title;
substantial d
4. If both present a title, the Court will determine.
amage or
(Meantime, the thing shall be judicially injury is
deposited.) (Art. 538) caused.
What are the rules on expenses and 3. Luxurious Owner has 2 Owner has 2
deterioration/loss? Expenses options: options:
Expenses Possessor in Possessor in Option 1: To Option 1: To

Good Faith Bad Faith allow posses allow posse
sor to ssor to
1. Entitled to Entitled to remove orna remove orna
Necessary reimburseme reimburseme ments if the ments if the
Expenses nt. nt. principal suff principal suff
ers no injury. ers no injury.
Right of No right of
retention retention; Option 2: To Option 2: To
pending full must vacate retain retain
reimburseme property the ornamen the ornamen
nt. (recourse t by refunding t by
is to file the amount refunding
collection spent for the value of
case). the ornamen the ornament
t. at the time
Liable for owner enters
damages into possess
as reasonab ion (which
le rent for means depr
period of eciated
possession. value).
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Owner may If possessor acquired the

4. No liability Always liable
Deterioratio unless due whether bef recover but object in good faith at a public
n/Loss to fraudulent ore or after must reimburse sale or auction; owner to pay
intent service the possessor the price paid.
or negligenc of judicial Owner cannot If possessor acquired it in
e after summons, for recover, even if good faith by purchase from a
service any cause, he offers to merchant’s store/ fairs/
of judicial even reimburse markets in accordance with
summons. fortuitous ev (whether or not Code of Commerce & Special
ent.
the owner had laws
lost or been
When is a notice of lis pendens proper? unlawfully a) if owner is by his conduct
In The Following Cases: (PORC-Q) deprived) precluded from denying
1. Action to Recover possession of real estate the seller’s authority to
2. Action to Quiet title sell
3. Action to remove Clouds
4. Action for Partition b) if seller has voidable title
which has not been
avoided at the time of
What are the requisites for possession of
sale to the buyer in good
movables?
faith for value and without
1. Good faith notice of the seller’s
2. Owner voluntarily parted with the possession of defect in title
the thing
3. In the concept of owner c) if recovery is no longer
possible because of
Possession in Good Faith - Equivalent to Title prescription
One who has lost or has been unlawfully deprived of
it may recover the thing from whomever possesses d) if sale is sanctioned by
it, ordinarily, w/o reimbursement. (Art. 559) statutory or judicial
authority
What must the owner prove?
e) if possessor obtained the
1. Ownership of the thing
goods because he was
2. Loss or unlawful deprivation or bad faith of the
an innocent purchaser for
possessor
value and holder of a
negotiable document of
Note: If owner acts negligently or voluntarily parts title to the goods
with the thing owned, then he cannot recover from
possessor.
5. LOSS OR UNLAWFUL DEPRIVATION
OF A MOVABLE
Summary of Recovery or Non-Recovery
Principle
When may a possessor lose possession? (PALA)
Owner may a) Possessor in bad faith
A possessor may lose his possession by:
recover without b) Possessor in good faith
reimbursement (if owner had lost the 1. Abandonment of the thing
property or been - renunciation of right; intent to lose the thing;
unlawfully deprived of it) no expectation to recover
the acquisition being 2. Assignment made to another by onerous or
from a private person gratuitous title
(Art. 559) - complete transmission of ownership rights;
both possession de facto and de jure are lost
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3. Destruction or total Loss of the thing or thing Note: The only right of ownership retained by the
went out of commerce naked owner is jus disponendi or right to dispose,
4. Possession of another if new possession lasted alienate or encumber. The usufructuary may actually
longer than 1 year (possession as a fact); real have all the other rights of ownership. This is what
right of possession not lost except after 10 years makes usufruct different from lease. Look at articles
(Art. 555) 578 and 610.
5. Any Other proceedings of any kind in Court
directly affecting the title to the land or use or What are the characteristics or elements of
occupation of the building usufruct?
Essential – those without which it cannot be
When is possession not lost? termed usufruct
When: a. A real right, whether registered in the
1. The movable property remains under the control Registry of Property or not;
of the possessor, even for time being he may not b. Of a temporary nature or duration
know their whereabouts (Art. 556) c. Purpose: to enjoy the benefits and derive all
2. When agent encumbered immovable property advantages from the object as a
without express authority – except when ratified consequence of normal use or exploitation
(Art. 557) Natural – that which ordinarily is present, but a
contrary stipulation can eliminate it because it is
When may possession still be recovered? not essential
d. Obligation of conserving or preserving the
1. Unlawfully deprived or lost (Art. 559)
form and substance (value) of the thing
2. Acquired at public sale in good faith – with
reimbursement (Art. 559) Accidental – those which may be present or
3. Provision of law enabling the apparent owner to absent depending upon the stipulation of the
dispose as if he is owner parties
4. Sale under order of the court a. Whether it be a pure or a conditional usufruct
5. Purchases made at merchant stores, fairs or b. The number of years it will exist
markets c. Whether it is in favor of one person or several,
6. Negotiable document of title etc. (Paras, supra, p. 572)
When is possession equivalent to title? How is usufruct distinguished from easement?

(Paras, supra, p. 574)
1. Possession is in good faith; (Art. 559)
USUFRUCT EASEMENT
2. Owner has voluntarily parted with the
Object May be real or Involves only
possession of the thing - Possessor is in concept
personal property. real property
of an owner
Can also be on
rights, but not
E. USUFRUCT personal rights
Extent What can be Limited to a
1. CHARACTERISTICS enjoyed here are particular use
all uses and fruits
of the property
What is a usufruct?
Usufruct – is the right to enjoy temporarily the Coverage Cannot be May be
constituted on an constituted in
property of another with the obligation of preserving
easement; but it favor or, or
its form and substance, unless the title constituting it
may be constituted burdening, a
or the law otherwise provides (Art. 562)
on the land piece of land
burdened by an held in usufruct
Note: The right of the usufructuary includes the right easement
to use (jus utendi) and the right to fruits (jus fruendi), Effect of Usually Not extinguished
while the owner retains the right to alienate or death extinguished by by the death of
encumber (jus disponendi) the property. death of the owner of the
usufructuary dominant estate
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Cause The owner is The owner or

What are the similarities between usufruct and more or less lessor is more or
easement? passive, and he less active, and
1. Both are real rights allows the he makes the
Both rights may be registered, provided that usufructuary to lessee enjoy the
usufruct involves real property enjoy the thing thing being
Both may ordinarily be alienated or transmitted given in usufruct leased
in accordance with formalities set by law (Paras, Repairs The usufructuary The lessee
supra, p. 575) has the duty to generally has no
make the duty to pay for
How is usufruct distinguished from lease? ordinary repairs repairs
(Paras, supra, p. 575) Taxes The usufructuary The lessee
pays for the generally pays no
USUFRUCT LEASE annual charges taxes
Covers all fruits Generally, covers and taxes on the
Extent
and uses as a only a particular fruits
rule or specific use As to A usufructuary The lessee
Nature Always a real A real right only if, other may lease the cannot constitute
right as in the case of things property itself to a usufruct on the
a lease over real another property leased
property, the
lease is A usufruct is considered as an “interest” in real
registered, or is property, a usufructuary right is one that may be
for more than 1 leased and sold. (Reyes v. Grey, GR No. 6869, 1911)
year, otherwise, it
is only a personal APPLICATION TO PERSONAL AND REAL
right PROPERTIES
Creator Can be created The lessor may or
only by the may not be the What are the rules regarding usufruct?
owner, or by a owner as when 1. Usufruct can be constituted even if the object is
duly authorized there is a sub- subject to Mortgage
agent, acting on lease or when the 2. Usufruct cannot be constituted on an object
behalf of the lessor is only a subject to Pledge
owner usufructuary 3. Usufruct can be constituted on an object
Origin May be created May be created subjected previously to a Lease
by law, contract, as a rule only by 4. Usufructuary can lease out the property to other
last will, or contract; and by parties
prescription way of exception 5. Usufructuary can construct improvements over
by law (as in the property subject to usufruct
case of an
implied new How is usufruct constituted?
lease, or when a 1. Legal Usufruct – but is not evident in today’s
builder has built laws
in good faith on 2. Will of parties (act inter vivos or last will)
the land of 3. By Prescription (Art. 563)
another a
building, when
2. CLASSIFICATION
the land is
considerably
What are the kinds of usufruct as to origin?
worth more in
1. Legal – created by law such as usufruct of
value than the
parents over the properties of their
building
unemancipated children
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2. Voluntary or conventional make use thereof in accordance with the purpose for
a. Created by will of the parties either by which they are intended, and shall not be obliged to
act inter vivos as in contract or donation; return them at the termination of the usufruct except
or in their condition at that time; but he shall be obliged
b. Act mortis causa as in a last will and to indemnify the owner for any deterioration they may
testament have suffered by reason of his fraud or negligence.
3. Mixed – created by law and by will of the parties (Art. 573)
4. Prescriptive – is one acquired by a third person
through continuous use of the usufruct for the What are the rules regarding abnormal usufruct?
period required by law (Art. 563). a. If deterioration is through normal use:
i. The usufructuary is NOT responsible
What are the kinds of usufruct as to quantity or 1. He can return them in the
extent? condition they might be in at the
1. As to fruits termination of the usufruct
Total 2. There is no necessity for him to
Partial make any repairs to restore
2. As to object them to their former condition for
Universal – if over the entire patrimony they can be preserved without
Particular/Singular - if only individual things the necessity of repairs
are included 3. Failure to return the thing will
result in indemnification for the
value the object may have at the
What are the kinds of usufruct as to the number
end of the usufruct
of persons enjoying the right?
b. If deterioration through an event or act
1. Simple – if only one usufructuary enjoys the right
that endangers their preservation
2. Multiple – if several usufructuaries enjoy the
i. Even though there was no fault or
right
negligence or fraud on the part of the
Simultaneous – at the same time
usufructuary, he is still required to
Successive – one after the other
make necessary ordinary repairs
Note: In this case, if the usufruct is created by
c. If deterioration because of fraud (dolo
donation, all the donees must be alive, or at least
incidente or fraud amounting to an
already conceived, at the time of the perfection
evasion of the obligation to preserve) or
of the donation.
negligence
i. The usufructuary is responsible, but
What are the kinds of usufruct as to the quality or such liability may be set off against
kind of objects involved? improvements
1. Usufruct over rights –
a. Rights must not be personal or
What is a quasi-usufruct?
intransmissible in character, so present or
Whenever the usufruct includes things which cannot
future support cannot be an object of
be used without being consumed, the usufructuary
usufruct
shall have the right to make use of them under the
2. Usufruct over things obligation of paying their appraised value at the
a. Normal (or perfect or regular) – this involves termination of the usufruct, if they were appraised
non-consumable things where the form and when delivered. In case they were not appraised, he
substance are preserved shall have the right to return at the same quantity and
b. Abnormal (or imperfect or irregular) – quality, or pay their current price at the time the
involves consumable things usufruct ceases. (Art. 574)
What is an abnormal usufruct? What are the rules for quasi-usufructs?

Whenever the usufruct includes things which, without a. The usufructuary (debtor-borrower) can use
being consumed, gradually deteriorate through wear them (as if he is the owner, w/ complete right of
and tear, the usufructuary shall have the right to pledge or alienation)
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b. BUT at the end of the usufruct, he must: and charges shall be pro-rated between said
1. Pay the appraised value, if appraised when possessor and the usufructuary)
1st delivered
2. If there was no appraisal, return same kind, b. Fruits growing at the end of usufruct belong
quality, & quantity OR pay the price current to the owner.
at the termination of the usufruct
Note: The owner must reimburse the usufructuary for
What are the kinds of usufruct as to terms or ordinary cultivation expenses and for seeds and
conditions? similar expenses, from the proceeds of the fruits.
1. Pure usufruct – no term or condition
2. With a term or period Rights of innocent third parties should not be
a. Ex die – from a certain day prejudiced (Arts. 566-569)
b. In diem – up to a certain day
c. Civil fruits accruing daily belong to the
c. Ex die in diem – from a certain day up to a
usufructuary in proportion to the time the
certain day
usufruct may last. (Art. 559)
3. With a condition
Note: Both stock dividends and cash dividends are
3. RIGHTS AND OBLIGATIONS OF
considered civil fruits.
USUFRUCTUARY
What is the rule regarding the usufructuary’s
a. Rights and Obligations of The Usufructuary
right to personally enjoy the thing in usufruct or
What are the rights of the usufructuary as to the
to lease it to another, subject to the period of the
property and its fruits?
usufruct?
1. To receive all the natural, industrial, and civil
fruits of the property.
General Rule: The lease expires at the end of the
2. To enjoy any increase which the thing in usufruct
usufruct or earlier
may acquire through accession and servitudes
established in its favor. (Art. 571)
Exception: In the case of leases of rural lands which
3. To personally enjoy the thing in usufruct or to
continues for the remainder of the agricultural year;
lease it to another, subject to the period of the
usufruct.
Note: If the usufruct should expire before the
4. To bring an action for recovery of the property,
termination of the lease, he or his heirs and
and to oblige the owner to authorize him for the
successors shall receive only the proportionate share
purpose and to provide him the necessary proofs.
of the rent that must be paid by the lessees. (Art 568)
(Art. 578)
If the naked owner allows the lease to continue even
5. To make useful improvements or expenses for
after the expiration of the usufruct, he will be entitled
pleasure without right of compensation and to
to the rentals pertaining to such extension.
remove the improvements provided no damage
is caused to the property in usufruct. What are the rights of the usufructuary as to the
6. To set-off the improvements against any damage usufruct itself?
the usufructuary may have caused to the 1. To alienate the right of usufruct subject to its
property. period. (Art. 572)
2. To exercise the right of a co-owner with respect
to the administration and collection of fruits from
What is the rule regarding the right of a
the co-owned property, and after the partition
usufructuary to receive all natural, industrial, and
from his share.
civil fruits of the property?
a. Fruits growing at the beginning of the What is the rule regarding the right to transfer
usufruct belong to the usufructuary. usufructuary rights?
a. It is either gratuitous or onerous;
Note: No necessity of refunding the owner for b. It is coterminous with term of usufruct;
expenses incurred but without prejudice to the right c. It cannot do acts of ownership such as
of 3rd persons. (Ex. if the fruits had been planted by a alienation or conveyance except when
property is:
possessor in good faith, the pending crop expenses
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i. Consumable when urgent and necessary for preservation of

ii. Intended for sale thing (Arts. 570-582)
iii. Appraised when delivered; if not
appraised and consumable – return
same quality (mutuum) Note: When a usufructuary introduces useful
improvements which he can remove without damage,
What are the rights of the usufructuary as to but the owner wants to retain them and offers to
advances and damages? reimburse him, the usufructuary prevails.
1. To be reimbursed for advances for extraordinary Reason: The right of removal is granted to him by the
repairs and expenses on the property, and for law. The rule is different from that in Art 546 and 548
taxes on the capital
2. To retain the property until he reimbursed for b. Obligations of the Usufructuary
such advances
What are the obligations of the usufructuary?
3. To be respected in his usufruct in case of
alienation of the property by the owner, and to be 1. Pay expenses to 3rd persons for cultivation and
indemnified for damages caused to it by latter. production at beginning of usufruct; those who
have right to fruits should reimburse expenses
What are the other rights of the usufructuary? incurred (Art. 567)
1. Right to hidden treasure as stranger (not entitled 2. Generally, usufructuary has no liability when due
as owner but as finder; if somebody else is the to wear and tear, thing deteriorates, obliged to
finder, usufructuary gets nothing) (Art. 566) return in that state; except when there is fraud or
2. Right not exempt from execution and can be sold negligence, then he shall be liable (Art. 573)
at public auction by owner
3. Naked owner still has rights but w/o prejudice to What are the obligations of the usufructuary
usufructuary; before the usufruct begins?
a. may still exercise act of ownership – To make an inventory of the property and to give
bring action to preserve ownership security for the fulfillment of his obligation. (Art. 583)
4. Right to necessary expenses from cultivation at But may be excused when no one will be injured
end of usufruct thereby. (Art. 585)
5. Right to make use of dead trunks of fruit bearing
trees and shrubs or those uprooted/cut by Note: Not applicable to parents who are usufructuary
accident but obliged to plant anew of children except when 2nd marriage contracted.
6. Right of usufructuary of woodland –
a. ordinary cutting as owner does What is Caucion Juratoria?
habitually or custom of place; Caucion Juratoria is a promise under oath to deliver:
b. cannot cut down trees unless it is for the
restoration of improvement of things in 1. Furniture necessary for the use of the
usufruct usufructuary
c. must notify owner first 2. House included in the usufruct
7. Right to leave dead, uprooted trees at the 3. Implements, tools and other movable property
disposal of owner with right to demand that necessary for an industry or vocation for which
owner should clear and remove them he is engaged (Art. 587)
a. if caused by calamity or extraordinary
event When may the usufructuary be excused from
b. impossible or too burdensome to fulfilling his/her obligation?
replace them a. If allowed by owner
8. Right to oblige owner to give authority and b. If not required by law or no one will be
furnish him proofs if usufruct is extended to injured
recover real property or real right or any movable c. When the usufructuary is the donor of the
property property or
9. Right to demand the increase in value of property d. When there is a stipulation in a will or
if owner did not spend for extraordinary repairs; contract
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2. To pay legal interest on the expenses for

In case the naked owner refuses to make the extraordinary repairs made, and the proper
exemption, appeal may be made to the courts and interest on taxes paid by the owner. (Art. 594 &
the judge should consider all the circumstances in 597)
deciding whether or not to give the grant.
What are the other obligations of the
What is the rule when usufructuary fails to give usufructuary?
security? 1. If usufruct is constituted on animals –
Owner may demand that: a. The usufructuary is duty bound to
1. Immovables be placed under administration; replace dead animals that die from
2. Negotiable instruments can be converted into natural causes or became prey;
registered certificates or deposited in bank; b. If all of them perish w/o fault but due to
3. Capital and proceeds of sale of movables be contagious disease / uncommon event
invested in safe securities; i. deliver remains saved
4. Interest on proceeds or property under c. if perish in part due to accident
administration belong to usufructuary; i. continue on remaining portion
5. Owner may retain property as administrator with d. if on sterile animals – as if fungible
an obligation to deliver fruits to usufructuary until i. replace same kind & quality
he gives sufficient security; (Arts. 583-602)
6. Effect of security is retroactive today he is
entitled to fruits. 4. RIGHTS OF THE OWNER
Note: Unless exempted by owner. What are the rights of the naked owner?
1. Alienate thing (Art. 581)
What are the obligations of the usufructuary 2. Cannot alter form or substance (Art. 581)
during the usufruct? 3. Cannot do anything prejudicial to usufructuary
1. To take care of the property as a good father of (Art. 581)
the family. (Art. 589) 4. Construct any works and make any improvement
2. To answer for damages to the property caused provided it does not diminish value or usufruct or
by a person to whom he has alienated or leased prejudice right of usufructuary (Art. 595)
his right of usufruct. (Art. 590)
3. To make ordinary repairs, and to notify the owner What are the obligations of the naked owner?
of the urgent extraordinary repairs which shall be 1. Extraordinary expenses; usufructuary obliged to
at the latter’s expense. (Art. 592-593) inform owner when urgent and there is the need
4. To permit works and improvements by the owner to make them
on the property not prejudicial to the usufruct. 2. Expenses after renunciation of usufruct
5. To pay annual taxes and charges on the fruits 3. Taxes and expenses imposed directly on capital
and to pay interest on taxes on capital when such 4. If property is mortgaged, usufructuary has no
taxes have been paid by the owner. (Art. 596- obligation to pay mortgage; if attached, owner to
597) be liable for whatever is lost by usufructuary
6. To notify the owner of any prejudicial act 5. If property is expropriated for public use – owner
committed by third persons, and he shall be liable obliged to either replace it or pay legal interest to
should he not do so, for damages, as if it was usufructuary of net proceeds of the same
caused through his own fault.
7. To pay for court expenses and costs regarding
the usufruct. 5. EXTINCTION, TERMINATION, AND
8. Insurance EXTINGUISHMENT
How is usufruct extinguished?

What are the obligations of the usufructuary at
Extinguishment of Usufruct: (PLDTERM)
the termination of the usufruct?
1. Prescription – use by 3rd person
1. To return the property in usufruct unless the
2. Termination of right of person constituting
usufructuary has a right of retention. (Art. 612)
usufruct
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3. Total Loss of thing 1. Loss in part – remaining part shall continue to be

4. Death of usufructuary – unless contrary clearly held in usufruct (Art. 604)
intention appears 2. Usufruct cannot be constituted in favor of a town,
5. Expiration of period of usufruct for which it was corporation, or association for more than 50
constituted or by the fulfillment of any resolutory years (Art. 605)
condition provided in the title creating the usufruct 3. Usufruct constituted on immovable whereby a
6. Renunciation of usufructuary – express building is erected – and building is destroyed –
7. Merger of usufruct and ownership in the same right to make use of land and materials
person (Art. 603) 4. If owner wishes to construct a new building – pay
usufructuary the value of interest of land and
What happens to the usufruct if it is the naked materials
owner who dies? 5. Both share in insurance if both pay premium; if
Death of naked owner does not extinguish usufruct. owner only – then proceeds will go to owner only
(Art. 603) (Arts. 607-608)
6. Effect of bad use of the thing – owner may
What are the rules in case of death of a demand the delivery of and administration of the
usufructuary in successive usufruct and thing with responsibility to deliver net fruits to
simultaneous usufruct? usufructuary at termination of usufruct (Art. 610)
A usufruct constituted in favor of several persons 7. Thing to be delivered to owner with right of
living at the time of its constitution shall not be retention for taxes and extraordinary expenses
extinguished until death of the last survivor. (Article w/c should be reimbursed, security of mortgage
611) shall be cancelled (Art. 612)
What are the rules in case of multiple usufruct? In case of expropriation: when naked owner alone
If constituted simultaneously: All the usufructuaries was given indemnity - he has the option to replace
must be alive (or at least conceived) at the time of with equivalent thing or pay usufructuary legal
constitution. It is the death of the last survivor which, interest; usufructuary alone was paid – must give to
among other causes, terminates the usufruct. naked owner and compel return of interest; if both –
each own indemnity, the usufruct extinguished (Art.
If constituted successively: If the successive 609)
usufructs were constituted by virtue of donation, all
the donee-usufructuaries must be living at the time of
If the builder is a usufructuary, his rights will be
the constitution- donation of the usufruct.
governed by Arts. 579 and 580. In case like this, the
terms of the contract and the pertinent provisions of
If the successive usufructs were constituted by virtue
law should govern. By express provision of law, the
of a last WILL, there should be 2 successive
usufructuary, does not have the right to
usufructuaries, and both must have been alive (or at
reimbursement for the improvements they may have
least conceived) at the time of the testator's death.
introduced on the property. (Moralidad vs. Parnes,
(Article 611)
GR No. 152809, 2006)
Example:
Q: If a usufruct is constituted in favor of 10 F. EASEMENTS
usufructuaries, and 4 of them die, will 4/10 of the
usufruct (corresponding to the share of the 4 dead What does easement/servitude mean?
usufructuaries) accrue to the naked owner or will they Meaning of easement/servitude
accrue in favor of the 6 surviving usufructuaries? It is an encumbrance enjoyed by or in favor
Ans: They will accrue in favor of the 6 surviving of an immovable called dominant estate
usufructuaries for the simple reason that the usufruct upon another immovable burdened by it
continues up to the death of the last survivor. called the servient estate. (easement of
common law, Art. 613).
Or in favor of a community or a person to
What are other important points regarding
whom the servient estate does not belong
extinction, termination, and extinguishment of
(servitude of civil law, Art. 614)
usufruct?
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Note: The first is called a real easement. The burdensome in any other way. (Articles 617 and
second is called a personal easement. 618)
An easement or servitude is a real right on another’s 2. CLASSIFICATION

property, corporeal and immovable, whereby the
owner of the latter must refrain from doing or allowing What are the kinds of easements according to
somebody else to do or something to be done on his purpose of easement or the nature of limitation?
or her property, for the benefit of another person or 1. Positive – one which imposes upon the servient
tenement. (Pilar Development Corporation v. estate the obligation of allowing something to be
Dumadag, GR No. 194336, 2013) done or of doing it himself. (Art. 616)
2. Negative – that which prohibits the owner of the
servient estate from doing something which he
1. CHARACTERISTICS
could lawfully do if the easement did not exist.
(Art 616)
What are the characteristics of easement?
1. A real right – an action in rem is possible against
the possessor of the servient estate What are the kinds of easements according to
2. Imposable only on another’s property party given the benefit?
3. Jus in re aliena – real right that may be alienated 1. Real (or predial) – for the benefit of another
although the naked ownership is maintained belonging to a different owner (e.g., easement of
4. Limitation or encumbrance on the servient water where lower estates is obliged to allow
estate for another’s benefit water naturally descending from upper estates to
5. There is inherence or inseparability from the flow into them) (Art. 614)
estate to which it belongs 2. Personal – for the benefit of one or more persons
Easements are inseparable from the estate or community (e.g., easement of right of way for
to which they actively or passively belong passage of livestock) (Art. 614)
(Art. 617); they are transmissible, cannot be
alienated or mortgaged independently of the What are the kinds of easements according to the
estate, or assigned to another immovable. manner they are exercised?
6. It is indivisible (even if the tenement be divided) 1. Continuous – their use is incessant or may be
Partition of either the servient or dominant incessant; (Art. 615)
estate between two or more persons does Note: For legal purposes for acquisitive
not affect the existence of the easement prescription, the easement of aqueduct is
7. It is intransmissible (unless the tenement considered continuous; easement of light and
affected also be transmitted) view is also continuous.
8. It is perpetual (as long as the dominant and
servient estate exists unless sooner extinguished 2. Discontinuous – used at intervals and depend
by the causes enumerated in the law). (Paras, upon the acts of man (e.g., right of way because
supra, p. 646-647). it can only be used if a man passes). (Art. 615)
What are the kinds of easements according to
What is the difference between inseparability of whether or not their existence is indicated?
easement and indivisibility of easement? 1. Apparent – made known and continually kept in
Inseparability of easement provides that here can be view by external signs that reveal the use and
no easement without the immovable to which they enjoyment of the same (Ex. right of way when
are attached while indivisibility of easement provides there is an alley or a permanent path). (Art. 615)
that: 2. Non-apparent – show no external indication of
1. If the SERVIENT ESTATE is divided between two their existence (Ex. easement of not building to
or more persons, the easement is not modified, more than certain height). (Art. 615)
and each of them must bear it on the part which
corresponds to him.
What is the Doctrine of Apparent Sign?
2. If it is the DOMINANT ESTATE that is divided
The existence of an apparent sign of easement
between two or more persons, each of them may
between two estates, established or maintained by
use the easement in its entirety, without changing
the owner of both, shall be considered, should either
the place of its use, or making it more
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of them be alienated, as a title in order that the What is an example as given by jurisprudence?
easement may continue actively and passively, Lot 1 and 2 owned by A. A sold Lot1 to B. Lot 2 has
unless, at the time the ownership of the two estates house which has windows. B built a 2-story house. A
is divided, the contrary should be provided in the title opposed since there is an easement of light and view.
of conveyance of either of them, or the sign aforesaid HELD: there is because the windows are an
should be removed before the execution of the deed. apparent sign. Altius non-tollendi- non building of a
This provision shall also apply in case of the division higher structure. (Amor v. Florentino, G.R. No. L-
of a thing owned in common by two or more persons. 48384, 1943)
(Art. 624)
What are the kinds of easements according to
What is the rule regarding the doctrine of rights given?
apparent sign? 1. Right to partially use the servient estate (Ex.
1. before the alienation, there is no true easement Right of Way);
a. after alienation: 2. Right to get specific materials or objects from the
i. there arises an easement if the sign servient estate;
continues to remain unless there is a 3. Right to participate in ownership (Ex. easement
contrary agreement (the continuance of of party wall)
the sign is the title) 4. Right to impede or prevent the neighboring estate
ii. there is no easement if the sign is from performing a specific act of ownership
removed or if there is an agreement to
this effect (Art. 624) What are the kinds of easements according to
source or origin and establishment of easement?
When is this doctrine applicable? 1. Voluntary – constituted by will or agreement of
a. Whether only 1 or both estates are alienated, the parties or by a testator. (Art. 619)
b. Even if there be only 1 estate but there are 2 2. Mixed – created partly by agreement and partly
portions thereof, as long as later on there is a by law
division of the ownership of the said portion, 3. Legal – constituted by law for public use or for
c. Even in the case of division of common private interest. (Art. 619)
property, though this is not an alienation (Art.
624) How is easement established?
1. By law (Legal)
When is this doctrine not applicable? 2. By the will of the owners (Voluntary)
If both estates or both portions are alienated to the 3. Through prescription (only for continuous and
same owner, for then there would be no true apparent easements) (Art. 619)
easement unless there is a further alienation, this
time, to different owners. (Art. 624) Resultantly, when the court says that an easement
exists, it is not creating one. For, even an injunction
What are the apparent signs of an easement that cannot be used to create one as there is no such
apparently exists? thing as a judicial easement. The court merely
1. Originally no true easement exists here declares the existence of an easement created by the
because there is only 1 owner. parties. (La Vista Association v. CA, GR No. 95252,
2. The article speaks of apparent visible 1997)
easements.
3. Sign of the easement does not mean a placard 3. MODES OF ACQUIRING
or signpost, but an outward indication that the EASEMENTS
easement exists.
4. It is not essential that there be an apparent sign How may Easement/Servitude be acquired?
between the 2 estates; it is important that the By:
easement exists between the 2 estates. 1. Title, that is, by judicial acts like law, donation,
contact, will (Art. 620).,
2. Prescription of 10 years through adverse
possession or frequent exercises (Art. 620). This
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applies only to continues and apparent 3. Renounce the easement totally if he desires to
easement, either: exempt himself from contribution to necessary
Positive from the day the dominant owner expenses. (Art. 628)
begins to exercise it, e.g., party wall 4. Ask for mandatory injunction to prevent
Negative from the day in which notarial impairment of his use of the easement. (Resolme
prohibition is made on servient owner e.g., v. Lazo, GR No. L-8654, 1914)
not to obstruct the passage light
3. Deed of recognition by servient owner, e.g., What are the obligations of the dominant owner?
right of way (Art. 623). 1. Notify the servient owner of works necessary for
4. Final judgment, e.g., court declares existence in the use and preservation of the servitude. (Art.
an action filed for the purpose (Art. 623). 627)
2. Contribute to the necessary expenses if there are
Resultantly, when the court says that an several dominant estates in proportion to the
easement exists, it is not creating one. For, even benefits derived from the works. (Art. 628)
an injunction cannot be used to create one as 3. Cannot alter or impose added burden on the
there is no such thing as a judicial easement. easement. (Art. 627)
The court merely declares the existence of an Cannot use the easement except for benefit
easement created by the parties. (La Vista originally contemplated
Association v. CA, GR No. 95252, 1997) In easement of right of way, he cannot
increase the agreed width of the path nor
5. Apparent sign established by owner of two deposit soil or materials outside the
adjoining estates. Then one estate is alienated boundaries agreed upon
and the easement continuous actively or 4. Choose the most convenient time and manner in
passively unless at the time of division, it is making the necessary works as to cause the least
provided that the easement will cease, or the sign inconvenience to the servient owner. (Art. 627)
removed before execution of deed (Art. 624).
What are the rights of the servient owner?
Note: All easements may be acquired by title. 1. Retain ownership of the portion on which the
However, only continuous and apparent easement is established and may use it in such a
easements may be acquired by prescription. manner as not to affect the exercise of the
easement. (Art. 630)
4. RIGHTS AND OBLIGATIONS OF THE 2. Change the place or manner of the use of the
OWNERS OF THE DOMINANT AND easement, provided it be equally convenient. (Art.
SERVIENT ESTATES 629)
3. Use the property subject of the easement unless
What are the rights of the dominant owner? there is an agreement to the contrary. (Art. 628)
1. Exercise all rights necessary for the use of the
easement. (Art. 625) The owner of the servient estate retains the
2. Make any works necessary for the use and ownership of the portion on which the easement is
preservation of the servitude; subject to the established and may use the same in such a manner
following conditions: (Art. 627) so as not to affect the exercise of the easement. (Pilar
The works shall be at his expense, are Development Corporation v. Dumadag, GR No.
necessary for the use and preservation of the 194336, 2013)
servitude;
They do not alter or render the servitude
more burdensome; What are the obligations of the servient owner?
The dominant owner, before making the 1. Contribute to the necessary expenses in case he
works, must notify the servient owner; and uses the easement, unless there is an agreement
They shall be done at the most convenient to the contrary
time and manner so as to cause the least 2. Not to impair the use of the easement
inconvenience to the servient owner 3. In case of impairment, to restore conditions to
the status quo at his expense plus damages
(Arts. 627-630)
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Light and View

5. MODES OF EXTINGUISHMENT Party Wall
Drainage of Building
How is easement/servitude extinguished? Intermediate Distances
Easement/servitude are extinguished by: Against Nuisance
1. Merger in one person of the ownership of both Lateral and Subjacent Support
dominant and servient estates.
2. Non-use for 10 years. Count: a. Relating to waters
Discontinuous Easement: from day not used,
Continuous Easement: from day an act contrary What are easements relating to waters?
to easement happens Lower estates are obliged to receive:
3. Dominant and/or servient estates fall into
1. The waters which naturally and without the
condition wherein the easement cannot be
intervention of man descend from the higher
used, e.g. flood permanently submerging the
estates; as well as
land. If the easement is revived, it has not yet
2. Stones or earth which they carry with them
prescribed.
4. Expiration of term or fulfillment of condition, in
conditional or temporary easement. Owner of the lower estate cannot construct works,
5. Renunciation by dominant owner which will impede the easement, nor can the owner
6. Redemption agreed upon by dominant and of the higher estate make works, which will increase
servient owners, such as payment of certain the burden.
sum, doing of an act, or other prestation.
Banks of rivers and streams, although of private
In co-ownership, there is no prescription for as long ownership, are subject throughout their entire length
as one of the co-owner exercises the easement(Art. and within a zone of 3 meters along their margins, to
633). the easement of public use in the general interest of
navigation, floatage, fishing and salvage.
6. LEGAL VS. VOLUNTARY EASEMENT
Estates adjoining the banks of navigable and
What are legal easements? floatable rivers are, subject to the easement of
Those imposed by law having for their object either towpath, for the exclusive service of river navigation
public use or the interest of private persons. (Art. and floatage.
634)
They shall be governed by the special laws and Compulsory easements for drawing of water and for
regulations relating thereto, and in the absence watering animals can be imposed for reasons of
thereof, by the Civil Code. (Art. 635) public use in favor of a town or village, after payment
of the proper indemnity.
What are voluntary easements?
Those which may be established by the owner of a Use of any water by anyone can be disposed by
tenement of piece of land as he may deem suitable, having the water flow through the intervening estates
and in the manner and form which he may deem best, but is obliged to do the following:
provided that he does not contravene the laws, public 1. Prove that he can dispose of the water and that
policy, or public order. (Art. 688) it is sufficient for the use intended.
2. Show that the proposed right of way is the
most convenient and least onerous to 3rd
7. KINDS OF LEGAL EASEMENTS
persons.
3. Indemnify the owner of the servient estate in
What are the kinds of legal easements?
the manner determined by the laws and
1. Public – for public or communal use
regulations.
2. Private – for the interest of private
persons/private use, including those relating to
(Art. 637-687): (WALL-DRIP) Easement of aqueduct is continuous and apparent
Waters even though the flow of water may not be continuous.
Right of Way (Arts. 637-638)
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same in such manner as not to affect the exercise of

b. Right of way the easement.” Thus, the owners of the servient
estate retained ownership of the road right-of-way
What is easement of right of way? even assuming that said encumbrance was for the
This is the easement or privilege by which one benefit of the owner of the dominant estate.
person or a particular class of persons is allowed to (Mercader, Jr. vs. Bardilas, GR No. 163157, 2016)
pass over another’s land, usually through one
particular path or line. (Art. 649) Under the law, and unlike in purchase of a property,
should the right of way no longer be necessary
What are the requisites for easement of right of because the owner of the dominant estate has joined
way? it to another abutting on a public highway, and the
1. The property is surrounded by estates of others, servient estate demands that the easement be
2. There is no adequate outlet to a public highway, extinguished, the value of the property received by
3. There must be payment of the proper indemnity. the servient estate by way of indemnity shall be
(Art. 649) returned in full to the dominant estate. (De Guzman
v. Filinvest Development Corporation. GR No.
What is the rule on indemnity in easements of 191710, 2015)
right of way?
1. Permanent passage. If the passage is The only servitude which a private owner is required
permanent, pay the value of land occupied by the to recognize in favor of the government is the
path plus damages. Upon extinction of the easement of a public highway, way, private way
easement, the indemnity is returned without established by law, or any government canal or
interest, for the interest is considered rent. lateral that has been pre-existing at the time of the
2. Temporary passage. If temporary, pay for the registration of the land. If the easement is not pre-
damages caused. Indemnity not returned existing and is sought to be imposed only after the
because damage has already been caused. (Art. land has been registered under the Land Registration
649) Act, proper expropriation proceedings should be had,
and just compensation paid to the registered owner.
How is it extinguished? (Eslaban v. Vda. De Onorio, GR No. 146062, 2001)
Extinguishment: Legal or Compulsory Right of
Way Easement of right of way is discontinuous. It may
1. When the dominant estate is joined to another be exercised only if a person passes or sets foot on
estate (such as when the dominant owner somebody else’s land. An easement of right of way
bought an adjacent estate) which is abutting a of railroad tracks is discontinuous because the right
public road, the access being adequate and is exercised only if and when a train operation by a
convenient person passes over another’s property. (Bomedco v.
2. When a new road is opened giving access to the Valdez, GR No. 124699, 2003)
isolated estate
3. In both cases: must substantially meet the If the easement is intended to perpetually or
needs of the dominant estate. Otherwise, the indefinitely deprive the owner of his proprietary rights
easement may not be extinguished. through the imposition of conditions that affect the
4. Extinguishment NOT ipso facto; the servient ordinary use, free enjoyment and disposal of the
estate may demand; if he chooses not to, the property or through restrictions and limitations that
easement remains, and he has no duty to refund are inconsistent with the exercise of the attributes of
indemnity ownership or when the introduction of structures or
5. If extinguished, must return the amount received objects which, by their nature, create or increase the
as indemnity to the dominant owner without any probability of injury, death upon or destruction of life
interest. Interest shall be deemed in payment and property found on the land is necessary, then the
for the rent. owner should be compensated for the monetary
equivalent of the land (National Power Corporation
vs. Tiangco, GR No. 170846, 2007).
Article 630 expressly provides that “[t]he owner of the
servient estate retains ownership of the portion on
which the easement is established and may use the
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c. Light and View

G. NUISANCE
What is the easement of light and view?
Period of prescription for the acquisition shall be What is a nuisance?
counted: Nuisance – is any act, omission, establishment,
1. From the time of opening of the window, if business, condition of property, or anything else
through a party wall which:
2. From the time of the formal prohibition upon the 1. Injures or endangers the health or safety of others
proprietor of the adjoining land, if window is 2. Annoys or offends the senses
through a wall on the dominant estate (Art. 668) 3. Shocks, defies, or disregards decency or morality
4. Obstructs or interferes with the free passage of
An easement of light and view can be acquired any public highway or street, or any body of water
through prescription of 10 years counting from the 5. Hinders or impairs the use of property (Art. 694)
time when the owner of the dominant estate formally
prohibits, through a notarial instrument, the adjoining Based on case law, the term “nuisance” is deemed to
lot owner from blocking the view of a window located be “so comprehensive that it has been applied to
within the dominant estate. (Alolino v. Flores, GR No. almost all ways which have interfered with the rights
198774, 2016) of the citizens, either in person, property, the
enjoyment of his property, or his comfort.” (Rana vs.
Q: X bought a lot with a one-storey residential Uy, GR No. 192861 & 192862, 2014)
house erected thereon from Y. Y owns an
adjoining lot to X’s lot. Y started construction on
a two-storey residential house. X files a NOTE: Lapse of time cannot legalize any nuisance,
complaint for easement of light and view, praying whether public or private. This is the reason why an
for a writ of preliminary injunction. Y filed a action to abate a nuisance is imprescriptible or may
motion to dismiss by way of demurrer of be filed at any time.
evidence. RTC denied the demurrer of evidence.
Y filed for certiorari with the CA. CA denied the What are the kinds of nuisances?
petition for certiorari for failing to prove that RTC 1. Public (or common) nuisance – affects the
committed a grave abuse of discretion. X public at large or a community or considerable
contends that CA’s decision denying the number of persons or their properties. Thus:
demurrer of evidence constitutes as the law of
A house constructed partly on a municipal
the case in the complaint for easements. Does a
decision denying a demurrer of evidence street affects adversely the use of that street
constitute as the law of the case in a complaint by the public; and
for easements? An unsanitary piggery located in residential
A: No. The doctrine of the law of the case only area emitting offensive odors and pernicious
applies when there has been a prior decision on the to the health of residents.
merits. Law of the case is a rule of general application A noisy or dangerous factory in a residential
that the decision of an appellate court in a case is the district
law to the case on the points presented throughout 2. Private nuisance – affects an individual or a
all the subsequent proceedings in the case in both limited number of persons only (Art. 695).
the trial and appellate courts and no question
Examples:
necessarily involved and decided on that appeal will
be considered on a second appeal or writ of error in The wall of a property in danger of collapsing
the same case, provided the facts and issues are on the adjoining property owned by another
tantiall the a e a tho e on which the r t person.
question rested and, according to some authorities, Obstruction to the right of way of a property
provided the decision is on the merits. (Spouses and its residents.
Garcia v. Santos, G.R. No. 228334, June 17, 2019) 3. Nuisance Per Se – one which is a nuisance at all
times and under any circumstances, regardless
NOTE: Read Spouses Garcia v. Santos, G.R. No.
of location or circumstances, such as a house
228334, June 17, 2019, in full and in the original.
constructed on a public street
4. Nuisance Per Accidens – nuisance by reason of
location, surrounding or in the manner it is
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conducted or managed. (De Leon, supra, p. 554-

555). It is not a nuisance by its nature but it may become
so by reason of locality, surrounding, or
A basketball court, an object of recreation in a circumstances (e.g. slaughter house).
barangay, is a mere nuisance per accidens and not
per se, as it does not pose an immediate danger to 3. LIABILITIES
safety of persons and property. Hence, it cannot be
summarily abated. (Cruz v. Pandacan Hiker’s Club, What are the liabilities of person who create
GR No. 188213, 2016) nuisances?
He who creates a nuisance is liable for the resulting
damages and his liability continues as long as the
What is the Doctrine of Attractive Nuisance?
nuisance continues.
An attractive nuisance is a dangerous instrumentality
or appliance which is likely to attract children at play.
Every successive owner or possessor of property
who fails or refuses to abate a nuisance in that
Note: Attractive nuisance doctrine does not apply to
property started by a former owner or possessor is
bodies of water. The attractive nuisance doctrine
liable therefor in the same manner as the one who
generally is not applicable to bodies of water, artificial
created it (Art. 696).
as well as natural, in the absence of some unusual
When may successor to the property be held
condition or artificial feature other than the mere
liable?
water and its location. (Hidalgo Enterprises, Inc. v.
The successor, to be held liable, must knowingly fail
Balandan, GR No. L-3422, 1952)
or refuse to abate the nuisance.
Who is liable for damages caused by an attractive
4. NO PRESCRIPTION
nuisance?
One who maintains on his estate or premises an
Lapse of time cannot legalize any nuisance, whether
attractive nuisance exercising due care to prevent
public or private (Art. 689).
children from playing therewith or resorting thereto, is
liable to a child of tender years who is injured thereby,
What is the effect of lapse of time?
even if the child is technically a trespasser in the
The action to abate a public or private nuisance is not
premises. (Hidalgo Enterprises, Inc. v. Balandan, GR
extinguished by prescription (Art. 1143[2], Civil
No. L-3422, 1952)
Code).
1. NUISANCE PER SE What is the exception?

Arts. 698 and 1143(2) do not apply to easements
What is a nuisance per se?
which are extinguished by obstruction and non-user
Nuisance per se is one which is a nuisance at all
for ten years. (See Art. 631).
times and under any circumstances, regardless of
location or circumstances, such as a house
5. REMEDIES AGAINST A PUBLIC
constructed on a public street or a fishpond
NUISANCE
obstructing creek.
What are the remedies against a public
Squatting is unlawful and the grant of the permits
nuisance?
fosters moral decadence. The houses are public
The remedies against a public nuisance are:
nuisance per se, and they can be summarily abated,
1. Criminal prosecution under the Revised Penal
even without the aid of the courts. The squatters can,
Code or a local ordinance;
therefore, be ousted. (City of Manila v. Gerardo
2. Civil action, including damages;
Garcia, et al. GR No. L-26053, 1967)
3. Abatement, summary and without judicial
proceedings
2. NUISANCE PER ACCIDENS
What is abatement?
What is a nuisance per accidens?
Abatement is the exercise of police power which
Nuisance per accidens becomes a nuisance by
includes the right to destroy property regarded as a
reason of circumstances, location or surroundings.
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public health and safety, and there is accordingly no

obligation for compensation. 8. JUDGMENT WITH ABATEMENT
6. REMEDIES AGAINST A PRIVATE Besides being held liable for damages or being
NUISANCE sentenced to the penalty, the Court may also order to
abate the nuisance.
What are the remedies against a private
nuisance? 9. EXTRAJUDICIAL ABATEMENT
The remedies against a private nuisance are the
same as in the case of public nuisance, except that Any person injured by a private nuisance may abate
criminal prosecution is not allowable. Hence the it by removing, or if necessary, by destroying the
only remedies are a civil action and abatement thing which constitutes the nuisance, without
without judicial proceedings (extrajudicial committing a breach of the peace or doing
abatement) (Art. 705) unnecessary injury. However, it is indispensable that
the procedure for extrajudicial abatement of a public
What are the effects on owners? nuisance by a private person be followed. (Art. 706)
Owner of nuisance property is not entitled to
compensation. (Art. 436) Note: An extrajudicial abatement can only be applied
for if what is abated is a nuisance per se and not
Subsequent owner of the property, having full nuisance per accidens.
knowledge of the existence of the nuisance and did
not remove the nuisance, is solidarily liable for the What are the requisites for extrajudicial
injuries and damages caused. The successor, to be abatement?
held liable, must knowingly fail or refuse to abate the 1. The nuisance must be specially injurious to the
nuisance private person affected
2. No breach of peace or unnecessary injury is
All Remedies May be Simultaneously Pursued to committed
Remove a Nuisance 3. Demand has been made upon the owner or
Aside from the remedy of summary abatement which possessor of the property to abate the nuisance
should be taken under the parameters stated in Art. 4. Demand has been rejected
704 (for public nuisances) and Art. 706 (for private 5. Abatement must be approved by the district
nuisances), a private person whose property right health officer and executed with the assistance
was invaded or unreasonably interfered with by the of the local police
act, omission, establishment, business, or condition 6. Value of the destruction does not exceed P3,000
of the property of another, may file a civil action to (Art. 704)
recover personal damages.
While DPWH, by virtue of the AO issued by the
Abatement may be judicially sought through a civil President, may abate the billboards for being public
action therefor if the pertinent requirements under the nuisance if it is specially injurious to it, the following
Civil Code for summary abatement, or the requisite procedure must be necessarily followed in order to
that the nuisance is a nuisance per se, do not concur. satisfy the standards of due process:
That demand be first made upon the owner
7. CRIMINAL PROSECUTION or possessor of the property to abate the
nuisance;
Criminal prosecution is only a remedy against a That such demand has been rejected;
public nuisance. In private nuisance, criminal That the abatement be approved by the
prosecution is NOT a remedy. However, if indeed a district health officer and executed with the
crime has been committed, as defined by the assistance of the local police and
Revised Penal Code, criminal prosecution can That the value of the destruction does not
proceed. (Paras, p. 751) exceed three thousand pesos.
(Department of Public Works and Highways
v. City Advertising Ventures Corp., G.R. No.
182944, 2016).
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be heard to say that his damage is due to a

10. SPECIAL INJURY TO INDIVIDUAL nuisance maintained by another
- The non-existence of the nuisance
When may a private person sue on account of a - Impossibility of abatement
public nuisance? - Public necessity (Paras, p. 752)
a) Ordinarily, it is the mayor who must bring the
civil action to abate a public nuisance 14. WHO MAY SUE ON PRIVATE
b) But a private individual can also do so, if the NUISANCE
public nuisance is SPECIALLY INJURIOUS
to himself. Any person injured by a private nuisance may file a
a. The action may be for injunction, civil action or cause the summary abatement thereof.
abatement or for damages. (Art.
703, Paras, p. 750) Possession of the real estate alone is sufficient to
sustain an action. Legal title is not necessary.
11. RIGHT OF INDIVIDUAL TO ABATE A
PUBLIC NUISANCE H. MODES OF ACQUIRING OWNERSHIP
What are the requirements for abatement of a What are the modes of acquiring ownership?
public nuisance by a private person? Modes of Acquiring Ownership (OLD-TIPS)
Any private person may abate a public nuisance 1. Occupation
which is specially injurious to him by removing, or if 2. Law
necessary, by destroying the thing which constitutes 3. Donation
the same, without committing a breach of the peace, 4. Tradition
or doing unnecessary injury. But it is necessary that: 5. Intellectual Creation
1. Demand has been made upon the owner or 6. Prescription
possessor of the property to abate the nuisance 7. Succession (Art. 712)
2. Demand has been rejected
3. Abatement be approved by the district health 1. OCCUPATION
officer and executed with the assistance of the
local police What is occupation?
4. Value of the destruction does not exceed P3,000 The acquisition of ownership by seizing corporeal
5. If public nuisance, it must be specially injurious things which have no owner, made with the intention
to him (Art. 704) of acquiring them, and accomplished according to
legal rules. (De Leon, supra, p. 585)
12. RIGHT TO DAMAGES
What are the requisites?
A person may maintain an action for damages 1. Seizure or apprehension
caused by a nuisance. If the nuisance is temporary 2. Property seized must be corporeal movable
or recurrent in character, each repetition of it gives property
rise to a new cause of action. The remedies of 3. Property must be susceptible of appropriation
abatement and damages are cumulative; hence, both 4. Intent to appropriate
may be demanded. Even if nuisance no longer exists, 5. Compliance with requisites or conditions of the
the aggrieved person may still pursue a civil action law (De Leon, supra, p. 585).
for damages suffered during the existence of the
nuisance. Note: The holding of the material is not required as
long as there is right of disposition.
13. DEFENSES TO ACTION
What is abandoned property?
What are the available defenses? Abandoned property – res derelicta, a thing is
1. Estoppel considered abandoned when:
- One who voluntarily places himself in a 1. The spes recuperandi (expectation to recover) is
situation whereby he suffers an injury will not gone.
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2. The animo revertendi (intention to return or to 2. If finder retains the thing found – he may be
have it returned) has been given up by the owner. charged with theft
(De Leon, supra, p. 587). 3. If owner is unknown, the movable must e
deposited with the mayor; mayor shall announce
What is un-owned property? publicly the finding of the movable for 2 weeks in
Un-owned Property – res nullius a way he deems best
1. Without an owner 4. If owner does not appear 6 months from
2. Intent to appropriate publication, the movable shall be awarded to the
3. Compliance with the requisites or conditions of finder
the law 5. If owner appears, he is obliged to pay the finder
1/10 of value of property as reward
What are some kinds of property acquirable by 6. If movable is perishable or cannot be kept without
occupation? deterioration or without expenses, it shall be sold
1. Those without an owner, like animals that are at public auction 8 days after the publication. (Art.
object of hunting and fishing 719)
2. Hidden treasure (he gets half as finder, by
occupation, provided he is not a trespasser). (Art. Note: For ownership, the owner must claim them
154) within 20 days from their occupation by another
3. Abandoned movables person
Note: Stolen property cannot be the subject of Can ownership of a piece of land be acquired by
occupation. occupation? No.
Land that does not belong to anyone is presumed to
Note: Hunting and fishing are regulated by special be public land. When a land is without an owner, it
laws: Act 2590; Fisheries Act 4003 as amended by pertains to the State based on the Regalian doctrine.
C.A.116, C.A. 147 and R.A. 659; Act 1499 as
amended by Act 1685; P.D. 534; Municipal What are the requisites for abandonment?
ordinances. 1. A clear and absolute intention to renounce a
right or a claim or to abandon a right or property;
What are the kinds of animals? and
1. Wild – considered res nullius when not yet 2. An external act by which that intention is
captured; when captured and escaped – expressed or carried into effect. (De Leon,
becomes res nullius again. (ex. Lion) supra)
2. Domesticated animals – originally wild but have
been captured and tamed; now belong to their The intention to abandon implies a departure, with
capturer; has habit of returning to premises of the avowed intent of never returning, resuming, or
owner; becomes res nullius if they lose that habit claiming the right and the interest that have been
of returning and regain their original state of abandoned. (Castellano v. Francisco, GR No.
freedom. (ex. Horse) 155640, 2008)
3. Domestic/tamed animals – born and ordinarily
raised under the care of people; become res 2. DONATIONS
nullius when abandoned by owner. (ex. Dog) (De
Leon, supra) a. Nature
Note: A person who has possession or control over What is the nature of donations?
a wild animal will usually have ownership based An act of liberality whereby a person disposes
on occupation as an original mode of acquiring gratuitously of a thing or right in favor of another, who
ownership. accepts it (Art. 725)
When is donation perfected?

What are the rules when movable found is NOT Donation is perfected from the moment the donor
treasure? knows of the acceptance by the donee (Art. 724)
1. Must be returned to owner
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The donation is perfected once the acceptance of the given and thus governed by the rules of
donation was made known to the donor. Accordingly, obligations and contracts
ownership will only revert to the donor if the
resolutory condition is not fulfilled. (Quijada v. CA, Note: Where a contract is seemingly a
GR No. 126464, 1998) remuneratory donation but is silent as to the
value of the burden imposed on the donee of a
What are the characteristics of a donation? thing of undetermined value, the law on contract
1. Unilateral – obligation imposed on the donor instead of the law on donations should govern.
2. Consensual – perfected at time donor knows of (Reyes v. Asuncion, GR No. 196083, 2015)
acceptance
What are the kinds of donation as to effectivity of
What are the requisites? (CIDAF) extinguishment?
1. The donor must have Capacity to make the 1. Pure – not subject to any condition (uncertain
donation of a thing or right event) or period
2. Donative Intent (animus donandi) or intent to 2. Conditional – subject to suspensive or
make the donation out of liberality to benefit the resolutory condition
donee 3. With a Term – subject to a period, suspensive
3. Delivery, whether actual or constructive of the or resolutory
thing or right donated
4. Donee must Accept or consent to donation Note: Illegal or impossible conditions in simple
5. Compliance with the prescribed Form and remuneratory donations are considered as
KINDS OF DONATION not imposed. Donation itself remains valid and
only the illegal or impossible conditions are
What are the kinds of donation as to effectivity? disregarded. (Art. 727)
1. Inter vivos - takes effect during the lifetime of
the donor, even though the property shall not be How to distinguish Donation Inter Vivos from
delivered till after donor’s death or even though Donation Mortis Causa?
it is subject to resolutory or suspensive condition DONATION INTER DONATION MORTIS
(Art. 729 and Art. 730). VIVOS CAUSA
2. Mortis Causa - takes effect upon the death of Disposition and Disposition happens
the donor and shall be governed by the rules of acceptance to take upon the death of donor;
succession (Art. 728) effect during lifetime of acceptance by donee can
3. Propter Nuptias - Donation by reason of and in donor and donee only be done after
consideration of marriage, before its celebration, donor’s death
in favor of one or both of the future spouses (Art. Already pertains to the Even if there is a term of
82, Family Code) donee unless there is a effectivity and effectivity
contrary intent is upon the death of the
What are the kinds of donation as to donor, still entitled to
consideration? fruits
1. Pure and Simple – When the cause of the Formalities required - Formalities required -
follow law on donations follow law on succession
donation is the pure liberality of the donor in
and certain kinds of to be valid, and donation
consideration of the donee’s merits,
donations and law on must be in the form of a
2. Remuneratory or compensatory – Donation is
obligations and will
given out of gratitude on account of the services contracts (suppletory)
rendered by the donee to the donor, provided Irrevocable at the Revocable ad mutuum
the services do not constitute a demandable instance of the donor; (exclusive will of donor)
debt. may be revoked only by
3. Modal – When the donation imposes upon the reasons provided by law
donee (necessarily future) a burden less than Revoked only for
the value of the thing given reasons provided for by
4. Onerous – the value of which is considered the law (except onerous
equivalent of the consideration for which it is donations)
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What are some rules to determine whether If oral, it must be with simultaneous delivery
Intervivos or Mortis Causa? of the thing or of the document representing
Where a donation was made “in consideration of love the right donated. (Art. 748)
and affection” but further stipulated that “It became
effective upon the death of the donor provided that in 2. Immovable Property
the event the donee should die before the donor, the To be valid, donation must be made in a
donation would be deemed automatically rescinded,” public instrument, specifying therein the
the Court held that the same was a mortis causa property donated and the value of the
since the right of disposition was not transferred to charges which the done must satisfy.
donee while donor is still alive. (Sicad v. CA, GR No. The acceptance of the donee may be made
125888, 1998) in the same deed of donation or in a separate
public document.
Where, however, a donation was made stipulating If the acceptance is made in a separate
that it would take effect after the death of the donor instrument, the donor shall be notified thereof
but further stipulated that (1) the donor will not in an authentic form, and this step shall be
dispose nor take it away from the donee and that (2) noted in both instruments.
the donor is parting with the beneficial ownership Acceptance must be be made during the
while he lived was held to be inter vivos. lifetime the donor. (Art.749)
In case of doubt, the conveyance should be deemed Note: A donation mortis causa must comply with the
donations inter vivos, rather than mortis causa, in formalities of a last will and testament otherwise; it
order to avoid uncertainty as to the ownership of the would be void and would produce no effect.
property subject of the deed (Villanueva v. Spouses (Maglasang v. Heirs of Corazon Cabatingan, GR No.
Branoco, GR No. 173804, 2011). 131953, 2002)
The reservation of the “right, ownership, possession If the donation is made in such a way that the full and
and administration of the property” and made the naked ownership will pass to the donee upon the
donation operative upon death, in the context of an death of the donor, then it is at that time when the
irrevocable donation, simply means that the donors donation will take effect and it is the donation mortis
parted with their naked title, maintaining only causa which should be embodied in the last will and
beneficial ownership of the donated property while testament. (Maglasang v. Cabatingan, GR No.
they lived. (Del Rosario vs. Ferrer, GR No. 187056, 131953, 2002)
2012)
WHAT IS THE RULE ON DOUBLE DONATIONS?
What are the badges of Mortis Causa?
Rule: Priority in time, priority in right
1. Title remains with donor (full or naked ownership)
and conveyed only upon death 1. If movable – one who first takes possession in
2. Donor can revoke ad nutum (Villanueva v. good faith
Spouses Branoco, G.R. No. 172804, 2011) 2. If immovable – one who recorded in registry of
3. Transfer is void if transferor survives transferee property in good faith
(Del Rosario v. Peralta G. No. 187056, 2010; No inscription, one who first took possession
Villanueva v. Spouses Branoco, GR No. 172804, in good faith
2011) In absence thereof, one who presents oldest
title
WHAT ARE THE FORMS OF DONATION?
b. Persons who may give or
1. Movable Property receive
If the value exceeds P5,000, the donation
and acceptance shall be made in writing. WHO MAY GIVE OR RECEIVE A DONATION?
Otherwise, the donation shall be void. 1. Capacity to be Donor
If the value is below P5,000, donation may be All persons who may contract and dispose of their
made orally or in writing. property may give donation. Those who cannot give
consent to a contract cannot be donors.
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By their parents or legal representatives if

Note: The word “making” in the Civil Code refers to the donation is onerous or conditional or
“perfection”. A contract of donation is perfected at the needs written acceptance
time the donor knows of the acceptance by the done. i. Natural guardian – not more than
This is the point in time when capacity to give (donor) 50,000
and capacity to receive (done) must both be present, ii. Court appointed – more than 50,000
i.e., at the time of perfection. 3. Conceived and unborn child, represented by
person who would have been guardian if already
Who are Disqualified to Donate? born (Arts. 738, 741 & 742)
Article 736. Guardians and trustees cannot donate
the property entrusted to them. (n) What Are The Requirements for Acceptance?
Article 739. The following donations shall be void:
1. Acceptance must be made during the lifetime of
(1) Those made between persons who were
the donor and donee (Art. 746)
guilty of adultery or concubinage at the time of
2. Acceptance may be made personally or through
the donation;
an agent with special or general and sufficient
(2) Those made between persons found guilty of
power, otherwise, the donation shall be void (Art.
the same criminal offense, in consideration
745)
thereof;
3. Authorization should be in a public instrument.
(3) Those made to a public officer or his wife,
4. Minors and others who cannot enter into a
descendants and ascendants, by reason of his
contract, shall have acceptance done through
office.
parents or legal representatives (Art. 741)
5. Conceived and unborn children shall have
In the case referred to in No. 1, the action for
donation accepted by persons who would legally
declaration of nullity may be brought by the
represented them if they were already born (Art.
spouse of the donor or donee; and the guilt of the
742)
donor and donee may be proved by
preponderance of evidence in the same action.
(n) c. Effects and Limitations of
Donations
Note: Donation between spouses during marriage,
except moderate gifts (Art. 87, Family Code) What are the effects and limitations of donation?
Note: Those made to incapacitated persons, though 1. Reservation of sufficient means for support of
simulated under the guise of another contract or donor and relatives.
through a person who is interposed. - Donation may comprehend all present
Note: The prohibition against donations between properties of the donor, or part thereof,
spouses must likewise apply to donations between provided he reserves sufficient means for
persons living together in illicit relations. (Joaquino v. his support and of relatives who, at the time
Reyes, G.R. No. 154645, 2003) of the acceptance of the donation, are by law
Note: In case of donation of the same thing to two or entitled to be supported by the donor.
more different persons, the rules on double sale will Otherwise, the donation will be subject to
apply. reduction upon petition of any person
affected. (Art. 750)
2. Capacity to be Donee 2. Donation of future property is prohibited. (Art.
All those who are not specially disqualified by law 751)
may accept donations. 3. Donation shall be limited to what the donor may
give by will. Otherwise, the donation is inofficious
(Art. 752).
Who May Accept Donations?
- The limitation applies when the donor has
1. Natural and juridical persons not especially
forced or compulsory heirs. The purpose is
disqualified by law
not to impair their legitimes.
2. Minors and other incapacitated
By themselves if pure and simple donation or
if it does not require written acceptance A donation would not be legally feasible if the donor
has neither ownership nor real rights that he can
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transmit to the donee. (Hemedes v. CA, GR No. was made on April 27, 1987 and registered in the
107132, 2008) name of Y’s family corporation, A. A has never
operated as a legitimate corporation, as it only
What Are The Rights and Obligations of Donor? entered into transactions with Y’s family.
1. Donor may reserve the right to dispose of some However, Y then swapped units with Z, and Y
started living in the subject property with X.
of the things donated, or of some amount or
When Y died in 2006, the children of X and Y
income charge thereon (Art. 755) began fighting over the properties. X alleged that
2. Donor may donate the ownership of property to he had the right to the property based on an
one person and the usufruct to another (Art. 756) implied trust. Did the execution of the Ante-
3. Donor is not obliged to warrant the things donated Nuptial Agreement waive, abandon, or otherwise
except when the donation is onerous, in which extinguish X’s alleged interest over the subject
case the donor is liable for eviction or hidden property? Assuming that the property was
defects in case of bad faith on his part. (Art. 754). indeed a gift, was it bestowed upon Y or A?
4. Donor may provide for reversion in his favor. (Art.
757) A: YES. Under the Agreement, those gifts bestowed
upon Y by X shall become the former’s exclusive
property. X’s act of purchasing the subject property
What Are The Rights and Obligations of Donee? using his own funds was a genuine act of gratuity in
1. If donation is made to several persons jointly, it is favor of Y. Consequently, since X declared in the
understood to be in equal shares and there is no Ante-Nuptial Agreement, which was executed after
right of accretion among them, unless the donor the purchase of the subject property, that he was
provides otherwise. explicitly discharging any and all interest in all gifts
If made to the husband and wife jointly, there is that he had bestowed upon Y, X’s alleged interest in
right of accretion. (Art. 753) the subject property has been completely waived in
2. Donee is subrogated to all the rights and actions favor of Victoria. Further, X’s defense that the
which in case of eviction would pertain to the property was bestowed upon A instead of Y, and
therefore is not under the coverage of the Ante-
donor (Art. 754)
Nuptial Agreement is without merit. While ordinarily,
3. If donation imposes upon the donee the A and Y are deemed to have unique and separable
obligation to pay the debts of the donor, it is juridical personalities, the factual circumstances of
understood to be liable to pay only the debts the instant case reveal that, in so far as the subject
previously contracted. property is concerned, they are one and the same
Note: In no case shall the donee be person. Thus, as X and Y expressly agreed in the
responsible for debts exceeding the value of Ante-Nuptial Agreement that the latter's properties
would be hers exclusively, that any gift bestowed
the property donated unless a contrary
upon Y from X would remain her exclusive property,
intention appears. (Art. 758)
and that X waived all direct and indirect interests in
4. If no stipulation regarding, they payment of debts, Y’s properties, it is clear to the Court that X has
donee is liable only when the donation has been waived and abandoned any and all interest in the
made in fraud of creditors subject property. (Delgado v. GQ Realty
Development Corp., G.R. No. 241774. September
Note: It is always presumed to be in fraud of
25, 2019)
creditors, when at the time of donation, the
donor did not reserve sufficient property to
d. Revocation and reduction of
pay his debts. (Art. 759)
donation
Q: X and Y met and fell in love after their REVOCATION

respective spouses both died. Both had children
from their previous marriages. When X and Y got What Is The Nature of Revocation Of Donations?
married on June 20, 1987, they executed an Ante-
Nuptial Agreement which stated that their
1. Affects the whole donation
properties would be governed by complete
separation of properties. This Agreement was 2. Applies only to donation inter vivos
executed on dated June 15, 1987. Before they 3. Not applicable to onerous donations
were married, Y bought a condominium unit for 4. Donor can revoke donation if the donee fails to
her daughter from her previous marriage, Z, comply with the conditions imposed by the donor.
using X’s funds (as an act of love). The purchase
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What Are The Grounds For Revocation? What is the General Rule?
1. Birth, Adoption, Reappearance of a Child Personal to the donor; heir cannot file an action to
It applies when the donor, at the time he made the revoke if donor did not file an action to revoke.
donation, did not have any child or descendant, or
erroneously thought so. Donation may be revoked or What is the Exception?
reduced when: Heirs may file in the following cases:
Donor should have any children, after (a) Donor has instituted proceedings but dies
donation, even though they be posthumous before bringing civil action for revocation
Donor’s child whom he believed to be dead Donor already instituted civil action but died,
when he made the donation, turn out to be heirs can substitute
living Donee killed donor or his ingratitude caused
Donor subsequently adopts a minor child the death of the donor
(Art. 760) Donor died without having known the
ingratitude done
2. Ingratitude Criminal action filed but abated by death
The donation may also be revoked by reason of
ingratitude in the following cases: 3. Non-compliance with conditions
Donee should commit some offense against Donation may be revoked when the donee fails to
the person, honor or property of the donor, or comply with any of the conditions which the donor
of his wife, or children under his parental imposed.
authority.
The alienations and mortgages made by the donee
Donee imputes to the donor any: are void, subject to the limitations imposed by the
a. Criminal offense; or Mortgage Law and Land Registration laws with
b. Any act involving moral turpitude; regard to third persons.
Note: Revocation applies even if the donee Action prescribes after 4 years from the
proves that the crime or act was actually noncompliance with the condition.
committed, unless the crime or the act has
been committed against the donee himself, Note: This action may be transmitted to the heirs of
his wife, or children under his authority. the donor and may be exercised against the donee’s
heirs. (Art. 764)
Donee unduly refuses to give support when
When is there No Period Fixed for the Condition
the donee is legally or morally bound to give
Imposed?
support to the donor.
General rule is that if the period is not fixed in the
contract, the court can fix the period. However, in a
Period for action prescribes within one year, counted case where 50 years had passed without the
from the time the donor: condition having been fulfilled the Court refused to fix
(a) Had knowledge of the fact; and a period and ruled that the donation can be revoked
It was possible for him to bring the action. for failure to comply with that condition. (Central
(Art. 769) Philippine University v. CA, GR No. 112127, 1995)
Note: Action granted to the donor by reason of Q: Local Government A thru its governor donated
ingratitude may not be renounced in advance and a portion of land to B. The Deed of Donation
may not be transmitted to the heirs of the donor. (Art. includes a condition that the property shall be
769 - 770) used for the purpose intended and with a
prestation that B must construct a building
Exception to Rule on Intransmissibility of Action thereon. It also prohibits B in selling, mortgaging,
with Regard to Revocation Due to Ingratitude or encumbering the donated property.
Furthermore, it includes a clause that allows an
automatic revocation in case there is a violation
of terms and conditions in the Deed of Donation.
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After the execution of the Deed, B leased out to C What are Illegal and Impossible Conditions?
a portion of a building that is constructed on the In Simple/Remuneratory donations – shall be
donated property. Years after, A executed a Deed considered as not imposed (Art. 727)
of Revocation of Donation and sent a demand In Onerous/Contract – annuls obligation; obligation
letter to B to vacate the premises. Subsequently, and conditions are void (Art. 1183)
A thru its representative filed a case for Unlawful
Detainer against B. A argues that B violated its
terms and conditions under the Deed of Donation REDUCTION
thereafter invoking the automatic revocation
clause in the Deed of Donation. On the other What Are The Grounds For Reduction?
hand, B contends that A has ceased to be the 1. Birth, appearance, or adoption of a child
owner of the subject property possessed and - Same cases as revocation
occupied by B by virtue of the Deed of Donation 2. Failure to reserve
Inter Vivos executed in favor of B. Furthermore,
- Failure of the donor to reserve sufficient
B argues that there is no violation of the
condition of the donation. Did the lease to C means for support of himself or dependent
violate the terms and conditions of the deed relatives
hence the donation can be automatically 3. Fraud against creditors
revoked? - Failure of donor to reserve sufficient
property to pay off existing debts
A: No. The donation being modal and onerous, the - Note: This is not actually an action to reduce
rules on contracts should prevail in the interpretation
a donation. It is rather an action to rescind a
of the Deed of Donation pursuant to Article 732 and
rescissible contract called Accion Pauliana.
733 of the Civil Code. Hence, the automatic
revocation clause is valid with the application of the Reduction of the donation is the end result
principle of autonomy of contracts. While the or consequence once the prayer or relief in
automatic revocation clause is valid, the courts are the complaint is granted.
not precluded from determining whether their 4. Inofficiousness
application or enforcement by the donors concerned - the donation exceeds that which the donor
are proper if the donees contest the revocation or can give by will
rescission. Moreover, Article 765 which states that
the donation shall be revoked at the instance of the
donor, when the donee fails to comply with any of the What Are Inofficious donations?
conditions which the former imposed upon the latter Shall be reduced with regard to the excess
shall be read with Article 1191. Action to reduce shall be filed by heirs who
While Article 1191 applies to reciprocal obligations
have right to legitime at time of donation
and donation essentially involves a unilateral act and
there is an express revocation clause in the Deed of (compulsory heirs of donor, heirs and
Donation, Article 1191 is nevertheless relevant in the successor-in-interest of compulsory heirs)
determination of the nature of the breach or violation Voluntary heirs/devisees/ legatees/ Donees/
of the obligation that will justify its rescission. The creditors of deceased donor cannot ask for
nature of the breach will entitle an injured party to reduction of donation
rescind is when such breach is so substantial and If there are 2 or more donations: recent ones
fundamental as to defeat the object of the parties in shall be suppressed
making the contract. In this case, the revocation is If 2 or more donation at same time – treated
not valid because first, while an unregistered lease equally and reduction is pro rata, but donor
for more than one year is an encumbrance, the
may impose preference which must be
encumbrance was not perpetual. Second, the lease
did not cover the entire donated property. Third, B expressly stated in donation
has already complied with its main prestation which Effect of declaration as inofficious: the
is the construction of the building. Thus, the donation is void only as to the portion
revocation of the Deed of Donation by A is improper impairing the legitime
and lacks legal basis. However, given that B
disregarded the provision of the Deed of Donation not Cause of action arising from the inofficiousness
to encumber the donated property, A is only entitled of donation arises only upon death of the donor,
to nominal damages. (Camarines Sur Teachers and as the value of the donation will be contrasted
Employees Association, Inc v. Province of with the net value of the estate of the donor
Camarines Sur, G.R. 199666, October 07, 2019)
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decedent. (Eloy Imperial v. CA, GR No. 112483, the period provided by law or through failure to
1999) bring the necessary action to enforce one’s right
within the period fixed by law (De Leon, p. 701);
Is Judicial Intervention Necessary for Automatic also referred to as limitation of actions (Morales
Revocation? v. CFI, GR No. L-52278, 1980)
In contracts providing for automatic revocation,
judicial intervention is necessary not for purposes of b. Prescription of Ownership and
obtaining a judicial declaration rescinding a contract Other Real Rights
but in order to determine whether or not the
rescission was proper. ACQUISITIVE PRESCRIPTION
Mode of acquiring ownership and other real rights
The stipulation of the parties providing for automatic through lapse of time.
revocation of the deed of donation, without prior
judicial action for that purpose, is valid subject to the What are the kinds of Acquisitive prescription?
determination of the propriety of the rescission Acquisitive prescription of ownership and other real
sought. Where such propriety is sustained, the rights may be ordinary or extraordinary.
decision of the court will be merely declaratory of the
revocation, but it is not in itself the revocatory act. Ordinary acquisitive prescription requires
(Zamboanga Barter Traders v. Plagata, G.R. No. possession of things in good faith and with just
148433, 2008) title for the time fixed by law.
Extraordinary acquisitive prescription requires
Checklist for Donation: neither good faith nor just title but possession
1. Whether onerous or gratuitous – if onerous, for a longer period.
governed by law on contracts
2. If gratuitous, whether mortis causa or inter vivos What are the Periods for acquisition?
– if mortis causa, governed by law on succession
3. If inter vivos, whether perfected or not (made 1. Movable
known to the donor). If no perfection, donation is 4 years with good faith & just title
void. 8 years if without
4. If perfected, check for the capacity of the donor to
give and the donee to receive. If no capacity, 2. Immovable
donation is void. 10 years with good faith & just title
5. Compliance with form, otherwise void. 30 years if without
Art. 748 (movable); and
Art. 749 (immovable) Was X able to prove that its predecessors in
interest have been in open, continuous, exclusive
3. PRESCRIPTION and notorious possession under a bona fide
claim of ownership since June 12, 1945 or
a. General Provisions earlier?
What is Prescription? A: NO, X failed to squarely address the CA's finding

It is a mode of acquiring ownership and other real that the records do not show proof of how X’s
rights through lapse of time (acquisitive prescription); predecessor in interest came to own the Subject
and losing rights and action (extinctive prescription) Land and how this was inherited. These are crucial
facts that X needed to establish to show that its
What are the kinds of Prescription? predecessor-in-interest had a prior valid claim of
1. Acquisitive prescription – it is the acquisition of ownership over the Subject Land. Precisely, San
ownership and other real rights through Pedro's claim of ownership rests on these crucial
possession of a thing in the manner and under facts, and without them such claim becomes
conditions provided by law. tenuous. With these facts missing, the Court wholly
2. Extinctive prescription – it is the loss or agrees with the CA that "evidence on record is
extinguishment of property rights or actions insufficient to prove that X’s predecessor-in-interest
through the possession by another of a thing for possessed or occupied the subject land in the
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concept of an owner since June 12, 1945, or earlier." 1. Private property

Also, the evidence that Y adduced to disprove X's 2. Patrimonial property of the State
claim of ownership, including tax declarations dated - To be subject of prescription,
1941, cast serious doubt on DMCI's evidence to a) the land must be classified as alienable and
show its and its predecessors-in-interest open, disposable, and
continuous, exclusive and notorious possession and b) it must be expressly declared by the State
occupation since June 12, 1945 or earlier. (D.M. that it is no longer intended for public use.
Consunji, Inc. v. Republic, G.R. No. 233339 (Republic v. Ching, G.R. No. 186166, 2010)
(Resolution), February 13, 2019)
It is only when alienable and disposable lands are
What are the General Requisites for Acquisitive
expressly declared by the State to be no longer
Prescription? (CTPL)
intended for public service or for the development of
1) Capacity of the possessor to acquire by
the national wealth that the period of acquisitive
prescription
prescription can begin to run.
2) Thing capable of acquisition by prescription
(Heirs of Delfin v. National Housing Authority, GR
3) Possession of thing under certain conditions
193618, November 28, 2016)
4) Lapse of time provided by law
The period of possession prior to the declaration that
Who May Acquire by Prescription?
land is alienable and disposable agricultural land is
1) Person who is capable of acquiring property by
included in the computation of possession for
other legal modes
purposes of acquiring registration rights over a
2) State
property so long as the land has already been
3) Minors (through guardians or personally) (Art.
declared as alienable and disposable at the time of
1108)
the application for registration. (AFP Retirement and
Separation Benefits System v Republic of the
Against Whom May Prescription Run? Philippines, G.R. No. 180086, 2014)
1) Minors and incapacitated person who have
parents, guardians or other legal Q: The Heirs of X filed a complaint against Sps. Y
representatives; for recovery of Ownership, Cancellation of Title,
2) Absentees who have administrators; Annulment of Sale, Reinstatement of Title,
3) Persons living abroad who have managers or Reconveyance and Damages before the MCTC of
administrators Maddela-Natigpuan, Quirino. It was alleged in the
4) Juridical persons, except the state with regard complaint that the Heirs of X have a valid claim of
to property not patrimonial in character (Art. ownership over a parcel of land at Dipintin,
1108); Quirino which was owned by X. It was further
5) Between co-heirs/co-owners (there must be alleged that as early as 1940’s or 1950’s, the
definite repudiation first) subject property had been in possession of X and
6) Between owner of property and person in that the Heirs of X had been cultivating the said
possession of property in concept of owner land personally and through their tenants. The
issue arose in 1997 when the heirs were trying to
Against Whom Does Prescription Not Run? pay arrears on the property at the Treasurer’s
1) Between husband and wife, even though there Office, the heirs were informed that the property
be a separation of property agreed upon in the had been declared for taxation by the Sps. Y. It
marriage settlements or by judicial decree. was discovered that the Sps. purchased the
2) Between parents and children, during the property from a certain Z who was supposedly
minority or insanity of the latter. issued a patent and a corresponding Original
3) Between guardian and ward during the Certificate of Title (OCT) in 1980. The RTC
continuance of the guardianship. (Art. 1109) dismissed the complaint stating that the Heirs
have failed to establish clear and convincing
What Are Things Subject to Prescription? (Art. evidence of their public, peaceful and
1113) uninterrupted possession of the property. The
All things within the commerce of men CA reversed the RTC decision, highlighting that
there were several uncontroverted facts that
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prove there was no natural interruption of Creditors and persons interested in making
possession of the said land by the heirs and prescription effective may avail it themselves
therefore prescription had set in, therefore notwithstanding express or tacit renunciation. (Art.
granting the complaint. Did the CA err in 1114)
reversing the decision of the RTC?
a. Ordinary
A: No. Under Section 11 of the Public Land Act, only
public lands suitable for agricultural purposes can be What is Ordinary Prescription?
disposed by virtue of a homestead patent application. 1. Possession in the concept of an owner, public,
The rule is well-settled that an OCT issued on the peaceful and uninterrupted;
strength of a homestead patent partakes of the 2. Within time fixed by law (4 years for movables;
nature of a certificate of title only when the land 10 years for immovables);
disposed of is really part of the disposable land of the 3. Good faith
public domain. The open, exclusive, and undisputed 4. Just title;
possession of alienable public land for the period
b. Extraordinary
prescribed by law creates the legal fiction whereby
the land, upon completion of the requisite period, ipso What is Extraordinary Prescription?
jure and without the need of judicial or other sanction, In extraordinary prescription, ownership and other
ceases to be public land and becomes private real rights over immovable property are acquired
property. In the case of Heirs of Santiago v. Heirs of through uninterrupted adverse possession thereof for
Santiago, wherein the Court held that since the 30 years without need of title or of good faith.
petitioners therein were able to prove their open, (Gesmundo v. CA, G.R. No. 119870, 1999).
continuous, exclusive, and notorious possession and
occupation of the land for several decades, such land What Are The Requisites For Extraordinary
was deemed to have already been acquired by the Prescription?
petitioners therein by operation law, thus segregating 1. Possession in the concept of an owner, public,
such land from the public domain. Open, exclusive, peaceful and uninterrupted;
and undisputed possession of public land for more 2. Within time fixed by law (8 years for movables;
than 30 years by a person in accordance with Section 30 years for immovables):
48(b) of the Public Land Act creates the legal fiction
whereby the said land, upon completion of the
Note: Just title and good faith NOT required in
requisite period of possession, ipso jure became
extraordinary prescription;
private property. (Heirs of Spouses Suyam v. Heirs
of Julaton, G.R. No. 209081, June 19, 2019)
What is meant by Good Faith?
What Things Are Not Subject to Prescription? 1) Reasonable belief that person who
1. Property of public dominion (Art. 1113) transferred the thing is the owner and
2. Intransmissible rights could validly transmit ownership.
3. Movables possessed through a crime (Art. 1133) 2) Must exist throughout the entire period
4. Registered land; lands covered by title (P.D. required for prescription.
1529, Sec. 47)
What is meant by Just Title?
Who Can Renounce Prescription? When the possession was acquired through one of
Persons with capacity to alienate may renounce the modes recognized by law, but the grantor was not
prescription already obtained but not the right to the owner or could not transmit any right (Art. 1129,
prescribe in the future. NCC); must be proved and never presumed; only
Titulo Colorado is required.
Renunciation may be express or tacit. Prescription is 1) Titulo Colorado – such title where there was a
deemed to have been tacitly renounced; renunciation mode of transferring ownership but something
results from the acts which imply abandonment of is wrong because the grantor is NOT the owner.
right acquired. (Art. 1112) 2) Titulo putativo - a person believes he has
obtained title but he has not because there was
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no mode of acquiring ownership, as when one Note: The periods are the same for dismissal of the
is in possession of a thing in the mistaken belief complaint based on acquisitive prescription and
that it had been bequeathed to him. (Doliendo v extinctive prescription. The first is substantive
Biarnesa, G.R. No. L-2765, 1906) because the defendant is already the owner of
3) Title must be one which would have been the property based on acquisitive prescription.
sufficient to transfer ownership if grantor had The second is procedural since the plaintiff did
been the owner. not file the complaint on time. In either case, the
4) Through one of the modes of transferring complaint will be dismissed.
ownership but there is vice/defect in capacity of
grantor to transmit ownership. WHEN PRESCRIPTION IS INAPPLICABLE
IMPRESCRIPTIBLE
What is meant by In Concept of Owner? 1. By Offender The offender can never
1) Possession NOT by mere tolerance of owner acquire, through
but adverse to that of the owner prescription, movables
2) Claim that he owns the property possessed through a crime
(Art. 1133).
What is meant by Public, Peaceful &
Uninterrupted? The action to recover from
Must be known to the owner of the thing. The the offender is
possession must not be secret or clandestine. imprescriptible.
1) Acquired and maintained without violence
3) Registered Title to lands registered
2) Uninterrupted (no act of deprivation by others)
lands under the Torrens System
possession
cannot be acquired by
prescription or adverse
c. Prescription Of Actions
possession as against the
registered owner or
What is prescription of actions?
hereditary successor (PD
It is a mode of losing rights and actions by mere lapse
1529). Action to recover
of time fixed by law.
registered land is
imprescriptible.
EXTINCTIVE PRESCRIPTION
4) Actions to Imprescriptible
a. What Are The Characteristics? demand right
of way; to
Extinction of rights and actions; also referred to as abate
limitation of actions (Morales v. CFI, GR No. L-52278, nuisance
1980) which implies that actions to enforce or 5) Actions to Imprescriptible
preserve a right or claim must be brought within a quiet title if
certain period of time. plaintiff is in
possession
b. What Are The Periods? 6) Void contracts Action to declare a contract
void is imprescriptible
Prescription of action to recover movables and
immovables
Note: An action to annul a
1) Movable
voidable contract
a) 4 years with good faith & just title
prescribes after 4 years
b) 8 years if without
7) Actions to Action to demand partition is
demand imprescriptible or cannot be
2) Immovable
partition; barred by laches, absent a
a) 10 years with good faith & just title
distinguished clear repudiation of the co-
b) 30 years if without
from laches ownership by a co-owner.
(De Leon, p. 253)
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8) Property of Property of public dominion

public cannot be acquired by
dominion prescription for they are WHAT IS THE PRESCRIPTIVE PERIOD TO
outside the commerce of RECOVER MOVABLES?
Prescriptive period for action to recover movables is
men.
8 years from the time the possession is lost. (Art.
1140)
Right of reversion or
reconveyance to the State However, the action shall not prosper if it is brought
of things which are not after 4 years when the possessor has already
susceptible of being acquired title by ordinary acquisitive prescription.
appropriated is not barred
by prescription. (De Leon, p. WHAT IS THE PRESCRIPTIVE PERIOD TO
758) RECOVER IMMOVABLES?
The period for bringing real actions over immovables
is 30 years unless the possessor has acquired
Land of the public domain
ownership of the immovable by ordinary acquisitive
must be declared alienable
prescription through possession of 10 years
and disposable either by the
(meaning with good faith and just title).
President or the Secretary
of the DENR to be the
If the action is based on fraud, the prescriptive period
subject of appropriation.
is 4 years from discovery of fraud.
The period of possession
prior to the reclassification
OTHER ACTION
of the land as disposable Prescriptive periods (Art. 1140-1149)
cannot be considered in
reckoning the prescriptive None Right of way
period in favor of the Abatement of nuisance
possessor. (Republic v. De
8 years Action to recover movables – from
Guzman Vda. De Joson,
time possession is lost (Art. 1140)
GR No. 163767, 2014)
30 years Real action over an immovable
property – from time possession is
lost (Art. 1141)
In [Sps.] Alfredo v. [Sps.] Borras, the Court ruled that 10 years Mortgage action (Art. 1142)
prescription does not run against the plaintiff in actual
possession of the disputed land because such
Upon written contract
plaintiff has a right to wait until his possession is
disturbed or his title is questioned before initiating an Obligations arising from law
action to vindicate his right. His undisturbed Court judgment (Art. 1144)
possession gives him the continuing right to seek the
aid of a court of equity to determine the nature of the Reconveyance based on implied
adverse claim of a third party and its effect on his title. constructive trust
The Court held that where the plaintiff in an action for 6 years Oral Contract
reconveyance remains in possession of the subject Quasi Contract (Art. 1145)
land, the action for reconveyance becomes in effect 4 years Injury to rights
an action to quiet title to property, which is not subject
Quasi Delict (Art. 1146)
to prescription.
The action for reconveyance was filed by Rescission/Annulment of contract
respondents Navares precisely because they 1 year Forcible entry
deemed themselves owner of the litigated property Unlawful detainer
prior to the claim of petitioners Tomakin. The filing of Oral Defamation (Art. 1147)
such action was an assertion of their title to the 5 years Other actions whose periods are not
property. (Heirs of Tomakin v. Heirs of Navares, G.R. fixed by law (Art. 1149)
No. 223624. July 17, 2019)
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Prescription starts from the accrual or the day the INTERRUPTION

action may be brought. (Art. 1150, NCC) What are the types of Interruption of possession
for the purpose of prescription? (PEN-C)
Q: X purchased from Y a parcel of land and tried

1. Natural
to register the Deed of Absolute Sale with the
Registry of Deeds in 1991. X was successful in a. Through any cause, possession ceases for
having the Deed annotated on the Transfer more than 1 year
Certificate of Title (TCT), but he was not able to b. If 1 year of less – as if no interruption; the
cause the transfer of the Torrens title in his name. time elapsed shall be counted in favor of
X discovered that the TCT had been stamped as
prescription
“cancelled” and were replaced by subsequent
Torrens titles in which transactions were made 2. Civil – when there is judicial summons to the
between Y and Z in 1996, and then from Z to A possessor
Corporation in 2005. X filed a complaint before Note: Exceptions
the RTC in 2014, and such complaint is an action
for reconveyance. The RTC dismissed the a) Void for lack of legal solemnities
complaint on the ground of prescription since an b) Plaintiff desists from complaint/allows
action for reconveyance of real property based proceedings to lapse
on an implied constructive trust arising from
fraud prescribes ten (10) years after the issuance c) Possessor is absolved from complaint
of title in favor of the defrauder. Here, the d) Express or tacit renunciation
complaint was filed in 2014, more than ten (10) 3. Express or tacit recognition by the possessor of
years after the transaction was made in 1996. Has the owner’s right;
the action for reconveyance prescribed?
A: No. There are two (2) kinds of actions for 4. Possession in wartime.
reconveyance. On one hand, Article 1144 (2) of the
Civil Code states that the prescriptive period for the
What Are The Rules in Computation of Period?
reconveyance of fraudulently registered real property
is ten (10) years reckoned from the date of the 1. Present possessor may tack his possession to
issuance of the certificate of title. This ten-year that of his grantor or predecessor in interest
prescriptive period begins to run from the date the 2. Present possessor presumed to be in
adverse party repudiates the implied trust, which continuous possession even with intervening
repudiation takes place when the adverse party time unless contrary is proved
registers the land. On the other hand, when the 3. First day excluded, last day included
consent is totally absent and not merely vitiated, the
contract is void. An action for reconveyance may also
be based on a void contract. When the action for What Are The Requisites for Tacking?
reconveyance is based on a void contract, as when 1. There must be privity between previous and
there was no consent on the part of the alleged present possessor
vendor, the action is imprescriptible. Whether an 2. Possible when there is succession of rights
action for reconveyance prescribes or not is therefore 3. If character of possession different:
determined by the nature of the action, that is, a) Predecessor in bad faith / possessor in
whether it is founded on a claim of the existence of good faith – use extraordinary prescription
an implied or constructive trust, or one based on the
existence of a void or inexistent contract. Here, X’s
action should be characterized primarily as one for When is There An Interruption of prescription of
reconveyance based on a void contract because actions?
when the transaction was made in 1996, Y had no 1. When they are filed before the court
more title to the property, in which he sold to X in 2. When there is a written extrajudicial demand
1991. This means that Z could not have acquired by the creditors
anything in 1996, and it follows that A Corporation 3. When there is any written acknowledgement
purchased nothing from Z in 2005. Thus, the action of the debt by the debtor (Art. 1155)
for reconveyance has not prescribed. (Gatmaytan v.
Misibis Land, Inc., G.R. No. 222166, June 10, 2020.)
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I. QUIETING OF TITLE 2) Preventive action – to prevent the casting of a

(threatened) cloud on the title. (Art. 476)
What is Quieting of Title?
It is a remedy or proceeding which has for its purpose 1. REQUISITES
an adjudication that a claim of title to realty or an
interest thereon, adverse to the plaintiff, is invalid or What Are The Requisites of Action to Quiet Title?
inoperative, or otherwise defective and hence, the (TICR)
plaintiff and those claiming under him may forever be 1. Plaintiff must have a legal or equitable Title or
free of any hostile claim. (Baricuatro, Jr. vs CA, GR interest in the real property (Art. 477)
No. 105902, 2000) 2. Cloud in such title
3. Such cloud must be due to some Instrument,
Note: An action to quiet title only involved real or record, claim, encumbrance or proceeding which
immovable property. It does not involve personal or is apparently valid but is in truth invalid,
movable property. ineffective, voidable or unenforceable prejudicial
to the plaintiff’s title (Art. 476)
What are the reasons to quiet title? 4. Plaintiff must Return to the defendant all benefits
1. Prevent litigation received from the latter or reimburse him for
2. Protect true title & possession expenses that may have redounded to his
3. Real interest of both parties which requires that benefit. (Art. 479)
precise state of title be known. (Paras, supra, p.
305) Q: Corp A owns a manufacturing plant for pipes
located on a 50,000 sqm land. Corp A’s plant is
covered by a valid certificate of title. Mr. X
What is an Action to Quiet Title? contends that Corp A’s plant site encroaches on
Puts an end to vexatious litigation in respect to his land and showed his own title over it. Corp A
property involved; plaintiff asserts his own estate and found that the title of Mr. X is spurious and so
generally declares that defendant’s claim is w/o filed an action for quieting of title. Will the action
foundation. (Baricuatro, Jr. v. CA, GR No. 105902, to quiet title prosper?
2000)
A: YES. For an action to quiet title to prosper, the
What is an action quasi in rem? plaintiff must have a legal or equitable title or interest
These are suits filed against a particular person or in the subject real property; and the deed, claim,
encumbrance, or proceeding claimed to be casting a
persons in respect to the res; may not be brought for
cloud on his title must be shown to be in fact invalid
the purpose of settling boundary disputes. or inoperative despite its prima facie appearance of
validity or legal efficacy. Corp A holds a legal title over
Note: An action quasi in rem is against a particular the plant site. Mr. X’s claim over the same appears to
person or defendant but the judgment is binding on valid by virtue of title but is in fact spurious. The
the whole world. indispensable requisites for an action to quiet title are
complete. (Filipinas Eslon Manufacturing Corp. v.
Applicable to real property or any interest therein. Heirs of Llanes, G.R. No. May 29, 2019)
The law, however, does not exclude personal
property from actions to quiet title. When Is Quieting Not Applicable?
1. Questions involving interpretation of
Note: An action to quiet title is imprescriptible if documents;
brought by the person in possession of the property. 2. Mere written or oral assertions of claims;
Otherwise, he must invoke his remedy within the Exceptions:
prescriptive period. (Berico v. CA, GR NO. 96306, If made in a legal proceeding;
1993) If it is being asserted that the instrument of
entry in plaintiff’s favor is not what it
What are the Classifications of Actions to Quiet purports to be;
Title? 3. Boundary disputes
1) Remedial action – to remove cloud on title 4. Deeds by strangers to the title, unless
purporting to convey the property of the plaintiff
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5. Instruments invalid on their face 2. But is, in truth and in fact, Invalid, ineffective,
6. Where the validity of the instrument involves voidable, or unenforceable, or extinguished (or
pure questions of law. (Paras, supra, p. 315- terminated) or barred by extinctive prescription
316) 3. May be Prejudicial to the title. (Paras, supra, p.
302-303)
2. DISTINCTIONS BETWEEN QUIETING
TITLE AND 3. PRESCRIPTION/NON-
REMOVING/PREVENTING CLOUD PRESCRIPTION OF ACTION
How to distinguish an Action to Quiet Title v. What are the rules on prescription/non-
Action to Remove Cloud? prescription of action?
ACTION TO ACTION TO
1. If plaintiff is in possession
QUIET TITLE REMOVE CLOUD
To end vexatious Procure The action does not prescribe. While the
litigation in cancellation, owner continues to be liable to an action,
respect to the release of an proceeding, or suit upon the adverse claim,
property instrument, he has a continuing right to be given aid by
concerned encumbrance or the court to ascertain and determine the
Purpose nature of such claim and its effect on his title,
claim in the
plaintiff’s title- which or to assert any superior equity in his favor.
affects the title or He may wait until his possession is disturbed
enjoyment of the or his title is attacked before taking steps to
property vindicate his right.
Plaintiff asserts Plaintiff declares his 2. If plaintiff is not in possession
own claim and own claim and title, The action may prescribe. Even if the action
declares that the and at the same is brought within the period of limitations, it
claim of the time indicates the may be barred by laches, where there is no
defendant is source and nature excuse offered for the failure to assert the
unfounded and of the defendant’s title sooner. If somebody else has
calls on the claim, pointing its possession, the period of prescription for the
Nature recovery of land is either 10 or 30 years
defendant to defects and prays
justify his claim for the declaration
on the property of its invalidity What is The General Rule?
that the same An action for reconveyance of a parcel of land based
may be on implied or constructive trust prescribes in 10
determined by years, the point of reference being the date of
the court registration of the deed or the date of the issuance of
the certificate of title over the property.
What is an Action to Remove Cloud?
Intended to procure cancellation, delivery, release of What is the Exception?
an instrument, encumbrance, or claim constituting a If plaintiff is in possession, the action is
on plaintiff’s title which may be used to injure or vex imprescriptible.
him in the enjoyment of his title
Q: X sold to Y a parcel of land as evidenced by an
What is a Cloud? unregistered Deed of Absolute Sale (DOAS). The
It is a semblance of title, either legal or equitable, or DOAS was duly notarized, but it did not specify
a claim or a right in real property, appearing in some the lot number of the property. According to the
legal form but which is, in fact, invalid or which would heirs of X, the land sold to Y was Lot No. 585. On
be inequitable to enforce. (Art. 476) the other hand, the heirs of Y argue that the
property purchased by Y was Lot No. 584. The
claim was substantiated by showing evidence
How to determine the Existence of a Cloud? (AIP) that Y has been in possession of the lot no. 584
1. Instrument or record or claim or encumbrance or in the concept of an owner, planting different
proceeding which is Apparently valid or effective; crops therein. When Y died, lot no. 584 was then
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possessed by the heirs of Y with the title of the sale entered into by Corporation A with them. The
land transferred to one of them and the realty tax ejectment case was resolved in favor of Spouses
being paid by them. The heirs of X then applied X.
for Free-Patent over lot No. 584. Upon approval of
the application, the Register of Deeds and issued Subsequently, Y filed a Petition for Quieting of
OCT No. FV-34211 in favor of the heirs of Y. Upon
Title regarding the same parcel of land. The RTC
discovery of the Free Patent granted to the heirs
of X, the heirs of Y filed a complaint for Quieting and CA ruled in favor of Y’s ownership. Hence,
of Title, Declaration of Inexistence of Instrument, Spouses X argued that there were two previously
and Damages against the heirs of X, mainly decided cases resolved in favor of them, and it
arguing that the Free Patent and the OCT was touched upon the same subject matter as Y’s
applied for and granted, respectively, in bad faith. Petition for Quieting of Title. That the ejectment
Was the application for free patent and issuance case, specifically, is conclusive upon the court a
of OCT done in good faith? quo with respect to their ownership over the
A. Yes. Based on the totality of evidence, the subject property. Is the resolution of the
application for Free Patent and the OCT were validly ejectment case in favor of Spouses X conclusive
applied for and issued in favor of the heirs of X and
upon the court with regards to their ownership?
does not encroach on the property of the heirs of Y.
Moreover, fraud cannot be presumed and must be
proven by clear and convincing evidence. Based on A: NO. As to the ejectment case, It simply does not
the testimony provided for by the DENR CENRO all follow that since the Ejectment Case was ruled in
the requirements for the issuance of the OCT
favor of petitioners Sps. X, the latter are conclusively
covering lot No. 584 were duly complied without any
deemed the owners of the subject property.
kind of irregularity. This was further bolstered by the
testimony of the land investigator who confirmed the
validity of Free Patent and OCT. At this juncture, the The only issue for resolution in an ejectment case is
Court stresses that findings of fact by administrative physical or material possession, where the parties to
agencies are generally accorded by the courts great
an ejectment case raise the issue of ownership, the
respect, if not finality, by reason of the special
knowledge and expertise of said administrative courts may pass upon that issue only for the
agencies over matters falling under their jurisdiction. purposes of determining who between the parties
It is not the task of the Court to once again weigh the has the better right to possess the property. Where
evidence submitted before and passed upon by the the issue of ownership is inseparably linked to that of
administrative body and to substitute its own possession, adjudication of ownership is not final and
judgment regarding sufficiency of evidence. (Quinol binding, but merely for the purpose of resolving the
v. Inocencio, G.R. No. 213517, April 10, 2019) issue of possession. (Spouses Pozon v. Lopez, G.R.
No. 210607 (Resolution), [March 25, 2019])
J. ACTIONS TO RECOVER PROPERTY

Q: Corp A, a public service corporation granted
What Are The Actions to Recover Ownership and the power of eminent domain, constructed and
energized a 230 KV transmission traversing a
Possession of Real Property and its Distinction?
property allegedly owned by Corp B. Corp B filed
a case for unlawful detainer against Corp A. The
1. ACCION INTERDICTAL OR trial court ruled in favor of Corp B and ordered
EJECTMENT SUIT Corp A to vacate the subject land, remove all
structures thereon, and pay Corp B for the
This is for cases on forcible entry and unlawful reasonable rental until they have vacated the
detainer. This summary action is filed with the proper premises. Corp A appealed and filed a complaint
for expropriation of the same property subject to
MTC within 1 year from the forcible entry or last
the unlawful detainer case. Because of the
demand to vacate in the case of unlawful detainer.
complaint for expropriation, the trial court
dismissed Corp A’s appeal in the unlawful
Q: Spouses X filed 2 Civil Cases regarding a detainer case for being moot and academic. Can
parcel of land. The first case was a complaint for Corp B’s unlawful detainer case prosper against
a public utility corporation granted the power of
ejectment against Y. The MeTC ruled in favor
eminent domain?
Spouses X, and that they were entitled to the
possession of the subject property based on the
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A: In a case filed by a landowner for recovery of v. Spouses Anastacio and Perla Barbarona, G.R. No.
possession or ejectment against a public utility 195814, 2018)
corporation granted the power of eminent domain, it
will not prosper. The landowner is denied the
remedies of ejectment and injunction for reasons of The issue in an accion publiciana is the "better right
public policy, public necessity, and equitable of possession" of real property independently of title.
estoppel. The proper recourse is for the ejectment This "better right of possession" may or may not
court to: proceed from a Torrens title. While there is no
1. Dismiss the case without prejudice to the express grant in the Rules of Court that the court
landowner filing the proper action for wherein an accion publiciana is lodged can
recovery of just compensation and provisionally resolve the issue of ownership, there is
consequential damage; ample jurisprudential support for upholding the power
2. Dismiss the case and direct the public utility of a court hearing an accion publiciana to also rule on
corporation to institute the proper the issue of ownership. The Court clarifies that in an
expropriation proceedings, pay just accion publiciana, the defense of ownership will not
compensation and consequential damages, trigger a collateral attack on the plaintiff's Torrens or
or; certificate of title because the resolution of the issue
of ownership is done only to determine the issue of
3. Continue with the case as if it is an
possession.
expropriation case and determine the just
compensation and consequential damages,
if the ejectment court has jurisdiction over While the RTC could have resolved the issue of
the value of the subject property. ownership provisionally to determine the "better right
of possession," which is allowed in an accion
Furthermore, the award of rental in arrears is publiciana, it was without any power or jurisdiction to
improper because Corp B is only entitled to just order the reconveyance of the land in dispute
compensation and consequential damages. While because that can be done only upon a definitive
the award of rental in arrears is proper in unlawful ruling on the said issue — something that cannot be
detainer cases, it is not the proper remedy if a public done in an accion publiciana. (Heirs of Cullado v.
service or utility corporation granted the power of Gutierrez, G.R. No. 212938, July 30, 2019)
eminent domain has occupied a privately-owned
property without first acquiring property thereto in a
negotiated purchase or expropriation proceedings. 3. ACCION REIVINDICATORIA
(National Transmission Corp. v. Bermuda
Development Corp, G.R. No. 214782, April 3, 2019) It must be filed within the same prescriptive period as
accion publiciana (10 years) with the proper RTC. It
2. ACCION PUBLICIANA involves both the issue of possession and ownership,
that is:
It is a plenary action to recover the real right of
possession which should be brought in the RTC a) that the plaintiff is the owner of the land or
within 10 years when dispossession has lasted for possessed it in concept of owner; and
more than one year. b) the defendant dispossessed him of the
land.
Although both ejectment and accion publiciana are
actions specifically to recover the right of possession, Q: X filed a Complaint for Declaration of Nullity of
Affidavit of Adjudication, Cancellation of Tax
they have two (2) distinguishing differences. The first
Declaration and OCT, Reconveyance, and
is the filing period. Ejectment cases must be filed
Damages with Prayer for Preliminary Injunction
within one (1) year from the date of dispossession. If against Y with the RTC of Bangued. X’s mother,
the dispossession lasts for more than a year, then an Z, died intestate and thus her possession over
accion publiciana must be filed. The second real property in Abra was transferred to X. When
distinction concerns jurisdiction. Ejectment cases, X was about to pay real estate tax on the property,
being summary in nature, are led with the MTC. he learned that it was already transferred in the
Accion publiciana, however, can only be taken name of Y by virtue of an Affidavit of Adjudication
cognizance by the RTC. (Eversley Childs Sanitarium upon the latter’s misrepresentation despite not
being related to Z. The Tax Declaration and OCT
issued to Y also cancelled those issued in Z’s
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name. Y refused to reconvey the property. Hence, When is Writ of Possession proper? (FEEEL)
Y filed a Motion to Dismiss alleging that the a. Foreclosure, judicial or extra-judicial, of
Regional Trial Court had no jurisdiction over the
mortgage. Provided that the mortgagor has
subject matter of the complaint because it was a
real action wherein the property was assessed at possession, and no third party has intervened
P3,000, and does not exceed P20,000, which b. Ejectment
meant that it was within the exclusive original c. Execution sales
jurisdiction of the first level courts. X filed his d. Eminent domain proceedings
Comment which stated that the principal action e. Land registration cases
was incapable of pecuniary estimation. The RTC
sided with X and denied Y’s Motion to Dismiss,
What is Writ of Demolition?
but this was reversed by the CA who stated that
Necessarily issued with writ of possession
the primary issue is who the lawful owner of the
property was, which makes it a real action. Did
the CA err in ruling that the case was a real A boundary dispute must be resolved in the context
action? of accion reivindicatoria, not an ejectment case. The
A: No. X’s Complaint involves the title to, possession boundary dispute is not about possession, but
of, and interest in real property, which indisputably encroachment, that is, whether the property claimed
has an assessed value of below P20,000.00. Hence, by the defendant formed part of the plaintiff’s
the RTC had no jurisdiction to hear the case. property. (Manalang vs. Bacani, GR No. 156995,
Jurisprudence has held that an action "involving title 2015)
to real property" means that the plaintiff's cause of
action is based on a claim that he owns such property
Q: The Heirs of X filed a complaint for Recovery
or that he has the legal rights to have exclusive
of Possession of Real Property against Z on the
control, possession, enjoyment, or disposition of the
ground that Z encroached upon their property.
same. Jurisprudence has held that an action
Consequently, the Heirs of X hired a geodetic
"involving title to real property" means that the
engineer to conduct a relocation survey and
plaintiff's cause of action is based on a claim that he
prepare a Relocation Plan. However, the
owns such property or that he has the legal rights to
Relocation Plan approved by the Land
have exclusive control, possession, enjoyment, or
Management Bureau did not mention that there
disposition of the same. Court's jurisdiction over the
was encroachment, hence the RTC and CA ruled
subject matter of a particular action is determined by
in favor of Z. Upon appeal to the SC, the Heirs of
the plaintiff's allegations in the complaint and the
X argue that the failure of the Relocation Plan to
principal relief he seeks. Where the ultimate objective
indicate the fact that Z had erected any structure
of the plaintiffs is to obtain title to real property, it
on the subject property is irrelevant because
should be filed in the proper court having jurisdiction
temporary structures such as sheds, shanties,
over the assessed value of the property subject
and make-shift fences do not need to be
thereof. Applying the foregoing in the instant case,
indicated in the plan because they are not
the primary relief being sought by X is really the
permanent structures. Was there encroachment?
confirmation of his right of ownership and possession
A: None. The Heirs of X's new theory that the
over the subject property as against Y, considering
encroachment committed by Z was by way of
that the cancellation of the subject OCT would merely
erecting temporary structures fails to convince.
be a consequence of the determination of X’ s title
During the trial, the Heirs of X made it abundantly
over the subject property. Hence, as the subject
clear that, in their allegation, that Z encroached on
matter of X’s Complaint involves title to, possession
the subject property by building houses and
of, and interest in real property which indisputably
occupying them. Hence, with the Relocation Plan
has an assessed value of below P20,000.00, the CA
submitted as evidence in chief by the Heirs of X
was correct in finding that the RTC had no jurisdiction
incontrovertibly showing that no buildings,
to hear, try and decide the case. (Montero v. Montero
enclosures, and other permanent structures were put
Jr., G.R. No. 217755, September 18, 2019.)
up by the respondents on the subject property, then
the same Relocation Plan cannot be considered as
What is Writ of Possession?
competent proof that the Lot of X was encroached
An order directing the sheriff to place a successful upon by Z. Heirs of Lupena v. Medina, G.R.
registrant under the Torrens system in possession of No.231639, January 22, 2020.)
the property covered by a decree of the court What is the Effect of the Lapse of One-Year
Period?
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If the dispossession allegedly took place by any of What is meant by Comparative Danger?
such means but the action is not brought within one Danger must be greater than damage to property.
year from deprivation of possession, the action is Consider the economic and sentimental value of the
properly a plenary action of accion publiciana or property. (Tolentino, supra, p. 68-69)
accion de reivindiacion. (Penta Pacific Realty Corp v.
Ley Construction and Development Corp., GR What is the Measure of Rational Necessity?
161589, 2014) The law does not require a person acting in a state of
necessity to be free from negligence or mistake. He
What is the General Rule on Writ of Injunction? must be given the benefit of reasonable doubt as to
Generally, not available as a remedy (Reason: The whether he employed rational means to avert the
presumption is that the one in possession disputably threatened injury. (De Leon, supra, p. 99).
has the better right)
The owner of the sacrificial property is obliged to
What is the Exception? tolerate the act of destruction but subject to his
When injunction is allowed: reimbursement by all those who benefited. (De leon,
1. Actions for forcible entry supra)
a) Writ of preliminary injunction within 10 days
from filing of the complaint to restore plaintiff In case of conflict between the exercise of the right of
in possession self-help and a proper and licit state of necessity, the
b) Courts shall decide within 30 days latter prevails because there is no unlawful
aggression when a person or group of persons acts
2. Ejectment pursuant to the right given in a state of necessity.
a) If possessor is a possessor in concept of an (Tolentino, supra, p. 70)
owner (possession de jure) for over a year
b. What Are The Actions for Recovery of
and being disturbed by repeated intrusions
Possession of Movable Property?
of a stranger
b) If an owner, still in possession, desires to
MOVABLE PROPERTY: REPLEVIN / MANUAL
prevent repeated intrusions by a stranger
DELIVERY
c) If the possessor is clearly not entitled to
property 1. Both principal and provisional remedy
2. Plaintiff shall state in the affidavit that he is the
owner of the property claimed, particularly
DOCTRINE OF SELF-HELP
describing it or that he is entitled to possession,
Article 429. The owner or lawful possessor of a thing
and that it is wrongfully detained by the other
has the right to exclude any person from the
3. Plaintiff must also give a bond double the
enjoyment and disposal thereof. For this purpose, he
amount of value of the property (Rules of Court,
may use such force as may be reasonably necessary
Rule 60, Sec. 2)
to repel or prevent an actual or threatened unlawful
- Note: This is called a replevin bond. A
physical invasion or usurpation of his property. (n)
replevin bond is double the value of the
property.
DOCTRINE OF STATE OF NECESSITY
What is the doctrine of State of Necessity? What is the Period?

It is the principle that authorizes the destruction of a 4 or 8 years from the time the possession thereof is
property which is lesser in value to avert the danger lost, in accordance with Art. 1132
posed to another property the value of which is much
greater. (Art. 432) When is Replevin Not Allowed? (WIP-CT)
1. Property is placed In Custodia legis
What are the Requisites of State of Necessity? 2. Taken for Tax assessment
1. Interference necessary to avert an imminent 3. Seized under Writ of execution
danger. 4. Personal properties that have already been
2. Damage to another much greater than damage to immobilized by destination based on art. 415
property (Art. 432) such as machineries, receptacles, instruments,
and implements intended by the owner of the
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tenement for an industry or works that may be

carried on.
5. Seized under Preliminary attachment. (Rules of
Court, Rule 60, Sec. 2)
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II. CREDIT TRANSACTIONS

A. PERSONAL PROPERTY SECURITIES
(R.A. 11507)
SCOPE OF THE PPSA

PART II: II. CREDIT TRANSACTIONS
A. PERSONAL PROPERTY SECURITIES (R.A. • Provisions on conventional pledge and
11507) chattel mortgage are repealed. (PPSA, Sec.
B. REAL ESTATE MORTGAGE 66)
• Applies to all transactions of any form that
secure an obligation with movable collateral
• EXCEPT:
o (1) Interests in aircrafts (subject to
Republic Act No. 9497, or the "Civil
Aviation Authority Act of 2008,")
and
o (2) Interests in ships (subject to
Presidential Decree No. 1521, or
the "Ship Mortgage Decree of
1978.")
TRANSACTIONS COVERED
1. Receivables
a. Outright transfers of receivables by
agreement, even if an outright
transfer of a receivable does not
secure the performance of an
obligation
2. Finance Leases And Retention-Of-Title
Sale
a. Finance lease of automobile, the
finance company takes ownership
of the automobile during the
duration of the lease, while lessee
operates the car
b. Title or ownership of the automobile
under these transactions serves the
same function as a security right.
Lessor and seller are not retaining
title to obtain the goods at the end
of the transaction. Rather, they
retain the title as a security
mechanism, so they can repossess
the asset if the lessee or buyer
defaults
SECURITY INTEREST
Property right in movable collateral that secures
payment or other performance of an obligation
(PPSA, Sec. 3[j])
PHASES OF A SECURITY INTEREST

1. Creation
a. A security interest under the PPSA
is created under a security
agreement.
2. Perfection
a. A security interest becomes
effective against third parties at the
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moment of its perfection. (PPSA, rights in it or the power to encumber

Sec. 11) it.
3. Enforcement or Extinguishment o What is the form of the security
a. After default, the secured creditor agreement? (PPSA, Sec. 6-7)
may sell or dispose of the collateral written contract
(PPSA, Sec. 49) in a commercially signed by the parties
reasonable manner (PPSA, Sec. includes the description of the
50). collateral (reasonably identifiable)
b. The security interest is extinguished may consist of one or more writings
when the secured obligations has that, taken together, establish the
been discharged. intent of the parties to create a
security interest
1. CREATION o Coverage - The term includes:
• Who creates a security interest? Grantor an agreement regardless of
• How is a security interest created? whether the parties have
o Security agreement denominated it as a security
o Operating lease for not less than 1 year agreement, between a grantor and
o Sale of an account receivable a secured creditor that provides for
• Extent of the security interest covers the creation of a security interest in
collateral (Model Law, Art. 2[jj]);
(PPSA, Sec. 8)
right of a buyer of accounts
o identifiable or traceable proceeds
receivable (PPSA, Sec. 3[j])
o commingled money or funds but limited
lessor under an operating lease for
to the amount of the proceeds
not less than one year (PPSA, Sec.
immediately before they were
3[j])
commingled
contract of sale where the buyer or
o Fixtures, Accessions, and Commingled
other transferee of a collateral
Goods (PPSA, Sec. 25)
acquires it subject to a security
A perfected security interest in a
interest (PPSA, Sec. 3[c][2]);
movable property which has become
financial lease agreement for the
a fixture, or has undergone accession
lease of goods (PPSA, Sec. 3[c][4])
or commingling shall continue
o Parties To a Security Agreement
provided the movable property
Grantor may be any of the
involved can still be reasonably
following:
traced.
• The person who grants a
• Continuity of the security interest
security interest in collateral to
(PPSA, Sec. 9) secure its own obligation or
A security interest shall continue in
o
that of another person;
collateral notwithstanding sale, lease,
• a buyer or other transferee of a
license, exchange, or other disposition of
collateral that acquires its right
the collateral.
subject to a security interest;
o Exception: Any party who obtains, in the
ordinary course of business, any • a transferor in an outright
movable property containing a security transfer of an accounts
interest shall take the same free of such receivable; or
security interest provided he was in good • a lessee of goods (PPSA, Sec.
faith. (PPSA, Sec. 21) 3[c])
Note: There is no good faith if the Secured creditor - person that has
security interest was registered prior the security interest (PPSA, Sec.
to his obtaining the property. 3[i])
• Security Agreement (PPSA, Sec. 5) Debtor - person who owes payment
o Creates a security interest or other performance of a secured
obligation, whether or not that
o Can a security agreement create a
person is a grantor of the security
security interest over future property?
Yes right securing payment or other
performance of that obligation,
When is the security interest over
including a secondary obligor such
future property deemed created?
as a guarantor of a secured
Only when the grantor acquires
obligation. (Model Law, Art. 2[h])
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recording the name of the holder of the

securities (PPSA, Sec. 13[a])
2. PERFECTION OF INTEREST
• A security interest shall be perfected when it Perfection by Control Agreement
has been created and the secured creditor 1. Definition (PPSA, Sec. 3[b])
has taken one of the means of perfection. a. With respect to securities, means an
agreement in writing among the issuer
Means of Perfection (PPSA, Sec. 12) or the intermediary, the grantor and the
A security interest may be perfected by: secured creditor, according to which
1. Registration of a notice with the Registry; the issuer or the intermediary agrees to
2. Possession of the collateral by the follow instructions from the secured
secured creditor; and creditor with respect to the security,
3. Control of investment property and without further consent from the
deposit account. grantor;
b. With respect to rights to deposit
General Modes of Perfection of Security Based account, means an agreement in
on Assets (PPSA, Sec. 12 and Rules, Sec. 4) writing among the deposit-taking
institution, the grantor and the secured
creditor, according to which the
SECURITY SECURITY SECURITY deposit-taking institution agrees to
INTEREST IN INTEREST IN INTEREST IN follow instructions from the secured
TANGIBLE INTANGIBLE DEPOSIT creditor with respect to the payment of
ASSETS ASSETS ACCOUNTS funds credited to the deposit account
without further consent from the
1. Registration; 1.Registration 1.Registration; grantor;
or or or c. With respect to commodity contracts,
2. Possession 2.Control 2.Creation of a means an agreement in writing among
agreement security interest the grantor, secured creditor, and
in favor of the intermediary, according to which the
deposit-taking commodity intermediary will apply any
institution or the value distributed on account of the
intermediary; or commodity contract as directed by the
3.Control secured creditor without further
agreement consent by the commodity customer or
grantor;
2. Parties To a Control Agreement
a. Intermediary (if the security consists of
Importance of Perfection intermediated securities) - in the
1. Security interest becomes binding on third regular course of business, maintains
parties securities accounts for others or both
2. Determines priority for others and for its own account and
3. Right of higher-ranking secured creditor to is acting in that capacity
take over enforcement commenced by a b. Deposit Taking Institution (if the
lower-ranking secured creditor security consists of funds in a deposit
account) - refers to a bank defined
Perfection By Control under General Banking Law, a non-
A security interest in a deposit account or stock savings and loan association as
investment property may be perfected by control defined under Revised Non-stock
through: Savings and Loan Association Act of
1. Creation of the security interest in favor of 1997, or a cooperative as defined
the deposit-taking institution or the under Philippine Cooperative Code.
intermediary; c. Grantor - grants a security interest in
2. Conclusion of a control agreement; or collateral to secure its own obligation or
3. For an investment property that is an that of another person; buyer or other
electronic security not held with an transferee of a collateral that acquires
intermediary, the notation of the security its right subject to a security interest;
interest in the books maintained by or on transferor in an outright transfer of an
behalf of the issuer for the purpose of
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accounts receivable; or lessee of goods Priority for Perfection by Control: Deposit

(PPSA, Sec. 3[b]) Account and/or Investment Property (PPSA, Sec.
d. Secured creditor - has security 18)
interest over the collateral (PPSA, Sec
3[i]); includes buyer of account Priority Over
receivable and a lessor of goods under security interest in a deposit
an operating lease for not less than one competing security
account (secured creditor is
year for purposes of registration and interest perfected
the deposit-taking institution
priority only. by any method
or the intermediary)
security interest in a deposit
competing security
account or investment
Perfection In Proceeds (PPSA, Sec. 14) interest
property that is perfected by
Upon disposition of a collateral: a control agreement
1. If the proceeds are in the form of except: security
Note: order of priority among
money, accounts receivable, interest of the
these are determined on the
negotiable instruments or deposit deposit-taking
basis of the date and time of
accounts institution or the
conclusion of the control
a. a security interest shall extend intermediary
agreements
to proceeds of the collateral rights to set-off that the Competing
without further act and be deposit-taking institution security interest in
continuously perfected may have against a grantor's the deposit
2. If the proceeds are NOT in the form right to payment of funds account
of money, accounts receivable, credited to a deposit account
negotiable instruments or deposit security interest in a competing security
accounts security certificate interest perfected
a. the security interest in such perfected by the secured by registration of a
proceeds must be perfected creditor's possession of the notice in the
by one of the means applicable certificate Registry
to the relevant type of security interest in
collateral within 15 days after electronic securities NOT
the grantor receives such security interest in
held with an intermediary
proceeds the same
perfected by a notation of
b. otherwise, the security interest securities
the security interests in the
in such proceeds shall not be perfected by any
books maintained for that
effective against third parties other method
purpose by or on behalf of
the issuer
Change In Means of Perfection security interest in
A security interest shall remain perfected despite a security interest in the same
change in the means for achieving perfection: electronic securities held securities
provided, that there was no time when the security with an intermediary perfected by
was not perfected (i.e., there is no gap between the perfected by the conclusion registration of a
time the security interest was perfected by the first of a control agreement notice in the
and the second mean) (PPSA, Sec. 15) Registry
Note: The order of priority among competing
Assignment Of Security Interest security interests in electronic securities held
If the creditor assigns the perfected security interest, with an intermediary perfected by the conclusion
an amendment notice may be registered to reflect the of control agreements is determined on the basis
assignment. (PPSA, Sec. 16) of the date and time of conclusion of the control
agreements.
PRIORITY OF SECURITY INTERESTS
Generally, the priority of security interests and liens Purchase Money Security Interest (PPSA, Sec. 23)
in the same collateral shall be determined according
to time of registration of a notice or perfection by What is a purchase money security interest?
other means, without regard to the order of creation (PPSA, Sec. 3[g])
of the security interests and liens. (Rules, Sec. 6.01)
A security interest in goods taken by the seller to
secure the price or by a person who gives value to
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enable the grantor to acquire the goods to the a. By purchase

extent that the credit is used for that purpose. money secured
creditor
Priority Over b. Before the
1 A purchase money 1. conflicting grantor receives
security interest in security possession of
equipment and its interest the inventory or
proceeds 2. rights of a livestock, or
IF perfected by buyer, lessee, acquires rights in
registration of notice or lien holder intellectual
not later than three 3 which arise property
days after the grantor between c. May cover
obtains possession of the delivery of multiple
equipment the transactions
equipment to between the
the grantor purchase money
and the time secured creditor
the notice is and the grantor
registered without the need
to identify each
2 A purchase money 1. conflicting transaction
security interest in security
consumer goods that is interest Other Priority Rules
IF perfected by 2. rights of a Priority Over
registration of notice buyer, lessee, Priority for security interest security
not later than three 3 or lien holder Instruments in an instrument interest in
days after the grantor which arise and or negotiable the
obtains possession of the between Negotiable document that is instrument or
consumer goods delivery of Documents perfected by negotiable
the consumer (PPSA, Sec. possession of document
goods to the 19) such that is
grantor and perfected by
the time the registration
notice is of a notice in
registered the Registry
Repairman/ person who perfected
3 A purchase money conflicting Mechanic’s provides security
security interest in: [IIL] perfected security Lien services or interest in
1. Inventory interest in the (PPSA, Sec. materials with the goods
2. Intellectual property same inventory, 20) respect to the
or intellectual goods, in the
3. Livestock property or ordinary course of
livestock business, and
Conditions: retains
1. perfected when the possession of
grantor receives the goods until
possession of the payment
inventory or Livestock perfected security other
livestock, or (PPSA, Sec. interest in security
acquires rights to 24) livestock securing interest in
intellectual property; an obligation the livestock
and incurred to enable Except:
2. written notification the grantor to perfected
to the holder of the obtain food or purchase
conflicting perfected medicine for the money
security interest in livestock security
the same types of IIL interest in
the livestock
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Condition: if How is a security interest enforced?

the secured 1. Judicial Process governed by rules
creditor promulgated by the SC
providing 2. Extrajudicial Process
credit for
food or Two ways for a secured creditor to enforce security
medicine interest over the collateral:
gives written a) sale or disposition of the collateral through
notification a public or private sale;
to the b) retention by the creditor of the collateral in
holder of total or partial satisfaction of the secured
the obligation
conflicting
perfected Recovery in Special Cases (PPSA, Sec. 48)
security Upon default, the secured creditor may without
interest in judicial process:
the same a) Instruct the account debtor to make
livestock payment to the secured creditor, and apply
before the such payment to the satisfaction of the
grantor obligation secured by the security interest
receives after deducting the secured creditor's
possession reasonable collection expenses.
of the food or b) In a negotiable document that is perfected
medicine by possession, proceed as to the negotiable
Grantor's security interest Other claims document or goods covered by the
Insolvency perfected prior negotiable document;
on the to the c) In a deposit account maintained by the
Priority of a commencement secured creditor, apply the balance of the
Security of insolvency deposit account to the obligation secured by
Interest proceedings in the deposit account; and
(PPSA, Sec. respect of the d) In other cases of security interest in a
22) grantor deposit account perfected by control,
instruct the deposit-taking institution to pay
remain perfected the balance of the deposit account to the
and retain the secured creditor's account.
priority
Procedure for Enforcement (as provided in the
PPSA)
Transferee Exceptions (PPSA, Sec. 21) 1. Optional Proposal for Retention of
• General Rule: Any party who obtains, in the Collateral by Secured Creditor (PPSA,
ordinary course of business, any movable Sec. 54)
property containing a security interest shall a. After default, the secured creditor may
NOT take the same free of such security propose to the debtor and grantor to
interest take all or part of the collateral in total
• Exception: if the party was in good faith or partial satisfaction of the secured
• When is there no good faith? obligation.
o if the security interest in the b. Who should the secured creditor
movable property was registered send a proposal to?
prior to his obtaining the property i. The debtor and the grantor;
ii. Any other secured creditor or lien
holder
3. ENFORCEMENT OF SECURITY INTEREST 1. Must have perfected the
After default, the secured creditor may sell or dispose security interest at least 5 days
of the collateral, publicly or privately (PPSA, Sec. 49) before the proposal is sent to
in a commercially reasonable manner (PPSA, Sec. the debtor and grantor
50). iii. Claimant of an interest in the
collateral
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1. given a written notification to 2. Grantor; and

the secured creditor before the 3. Any real estate mortgagee (if
proposal is sent to the debtor the collateral is a fixture)
and the grantor iii. The secured creditor is entitled to
c. When can the secured creditor an order granting possession of
retain the collateral? the collateral upon the court
i. For full satisfaction of the secured finding that
obligation 1. a default has occurred under
1. If the secured creditor does not the security agreement; and
receive a written objection 2. that the secured creditor has
from any person entitled to a right to take possession of
receive the proposal within 20 the collateral.
days after the proposal is sent iv. The court may direct the grantor to
to such person; or take such action as the court
ii. For partial satisfaction of the deems necessary and appropriate
secured obligation so that the secured creditor may
1. if the secured creditor receives take possession of the collateral.
the affirmative consent of each 3. Notification of Disposition at least 10
addressee of the proposal in days before disposition (PPSA, Sec. 51)
writing within 20 days after the a. Who notifies? Secured creditor
proposal is sent to that person b. Who shall be notified?
2. Expedited Repossession of the Collateral i. Grantor
(PPSA, Sec. 47) 1. But the grantor may waive the
a. How can the secured creditor take right to be notified
possession of the collateral for ii. Any other secured creditor or lien
disposition? holder
i. Extrajudicial means 1. Must have held the security
1. security agreement so interest (perfected by
stipulates; and registration) at least 5 days
2. possession can be taken before the date of notification
without a breach of the peace iii. Claimant of an interest in the
ii. Judicial Means collateral
1. If it cannot be done 1. If they notified the secured
extrajudicially. creditor and it was received by
b. What constitutes a breach of peace? the latter before the secured
Includes creditor gave notification of the
i. entering the private residence of the proposed disposition to the
grantor without permission grantor
ii. resorting to physical violence or c. When is a notification of disposition
intimidation sufficient?
iii. being accompanied by a law i. if it identifies the grantor and the
enforcement officer when taking secured creditor;
possession or confronting the ii. describes the collateral;
grantor iii. states the method of intended
c. What is the process for judicial disposition; and
repossession? iv. states the time and place of a public
i. The secured creditor shall be disposition or the time after which
entitled to an expedited hearing other disposition is to be made
upon application for an order d. When is notification not needed?
granting the secured creditor When the collateral:
possession of the collateral. i. is perishable;
ii. The secured creditor shall provide ii. threatens to decline speedily in
a copy of the application, including value; or
all supporting documents and iii. is of a type customarily sold on a
evidence for the order granting the recognized market
secured creditor possession of the e. Can the right to be notified be
collateral, to the waived by the grantor?
1. Debtor; i. Yes, but only after the default.
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4. Sale or Disposition (PPSA, Sec. 49) collateral if a written demand and

a. How is the disposition to be made? proof of the interest are received
i. Publicly or privately before distribution of the proceeds
ii. Commercially reasonable manner is completed.
iii. In good faith b. What happens if there is a surplus?
b. When is the disposition Secured creditor shall account for it to
commercially reasonable? (PPSA, the grantor
Sec. 50) c. What happens if there is a deficiency?
i. if the secured creditor disposes of Debtor shall be liable
the collateral in conformity with 6. Effects of Disposition: Rights of Buyers
commercial practices among and Other Third Parties (PPSA, Sec. 53)
dealers in that type of property a. If a secured creditor sells the collateral,
ii. A disposition is not commercially the buyer shall acquire the grantor's
unreasonable merely because a right in the asset free of the rights of any
better price could have been secured creditor or lien holder.
obtained by disposition at a b. If a secured creditor leases or
different time or by a different licenses the collateral, the lessee or
method from the time and method licensee shall be entitled to the benefit
selected by the secured creditor. of the lease or license during its term.
c. When is the method of disposition c. If a secured creditor sells, leases or
deemed conclusively licenses the collateral not in
commercially reasonable? compliance with the provisions for
i. When the method has been enforcement
approved in any legal proceeding i. General Rule: buyer, lessee or
d. What should be the condition of the licensee of the collateral shall not
collateral? acquire the rights or benefits
i. Present condition; or ii. Exception: buyer, lessee or
ii. Following any commercially licensee had no knowledge of
reasonable preparation or such violation that materially
processing prejudiced the rights of the grantor
e. Who may buy the collateral in the or another person
sale? 7. Redemption (PPSA, Sec. 45)
i. A secured creditor may buy the a. Who is entitled to redeem the
collateral but only if the collateral collateral?
is of a kind that is i. Any person who is entitled to
1. customarily sold on a receive a notification of disposition
recognized market or b. How is the redemption done?
2. the subject of widely i. By paying or otherwise performing
distributed standard price the secured obligation in full,
quotations including the reasonable cost of
5. Application of the Proceeds (PPSA, Sec. enforcement.
52) c. When is there no right of
a. How should the proceeds of the redemption?
disposition be applied? The i. Waiver
proceeds of disposition shall be applied ii. The collateral is sold or otherwise
in the following order disposed of, acquired or collected
i. The reasonable expenses for the by the secured creditor or until the
disposition, including reasonable conclusion of an agreement by the
attorneys' fees and legal secured creditor for that purpose;
expenses incurred by the secured and
creditor; iii. The secured creditor has retained
ii. The satisfaction of the obligation the collateral
secured by the security interest of
the enforcing secured creditor; Right of Higher-Ranking Secured Creditor to
and Take Over Enforcement (PPSA, Sec. 46)
iii. The satisfaction of obligations a) Even if another secured creditor or alien
secured by any subordinate holder has commenced enforcement, a
security interest or lien in the secured creditor whose security interest has
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priority over that of the enforcing secured vi. If the prescribed fee has
creditor or lien holder shall be entitled to been tendered, or an
take over the enforcement process. arrangement has been made
b) This right may be invoked at any time for payment of fees by other
before means.
a. the collateral is sold or otherwise b. Each grantor must authorize the
disposed of, or registration of an initial notice by
b. retained by the secured creditor or signing a security agreement or
c. until the conclusion of an otherwise in writing.
agreement by the secured creditor c. A notice may be registered before
for that purpose a security agreement is
c) Failure of timely invocation: loses the right concluded.
a. Note: the purchaser from the i. Once a security agreement is
disposition takes it free from any concluded, the date of
lien, including that of a higher- registration of the notice shall
ranking secured creditor be reckoned from the date
d) This includes the right to enforce the rights the notice was registered.
by any method available to a secured ii. A notice of lien may be
creditor under the PPSA registered by a lien holder
without the consent of the
person against whom the lien
REGISTRATION is sought to be enforced.
A. Three Kinds of Notice d. The registration of a single notice
Purpose of Notice may relate to security interests
Initial Notice To perfect a security created by the grantor under 1 or
interest more than one security agreement.
Amendment To provide new (PPSA, Sec. 29)
Notice information in the
registered notice C. Effectiveness Of Notice (PPSA, Sec. 30)
To extend the 1. At the time the notice is
effectivity of the discoverable in the Registry
notice records
Termination Secured obligation 2. During term stated in the notice
Notice discharged; partial 3. Notice substantially complying
release of collateral; with requirements
mistaken collateral; a. Except those that are
no security seriously misleading (i.e.,
agreement; and does not provide the
extinguished identification number of the
grantor)
B. Sufficiency of INITIAL NOTICE (PPSA, 4. Retrievable in a search of the
Sec. 28) Registry against the correct
a. Registration must be allowed if the identifier of the grantor
following requirements are present:
i. If it identifies the grantor by D. AMENDMENT NOTICE (PPSA, Sec. 32 and
an identification number; Rules, Sec. 5.08)
ii. If it identifies the secured a. A notice may be amended by the
creditor or an agent of the registration of an amendment
secured creditor by name; notice that:
iii. If it provides an address for i. Identifies the initial notice by
the grantor and secured its registration number; and
creditor or its agent; ii. Provides the new
iv. If it describes the collateral; information.
v. If it states the duration of b. The amendment notice to be valid
effectivity of may be filed:
the security interest (Rules, i. By the secured creditor
Sec. 5.05); and alone, if the changes to
the security interest can be
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effected with the sole the effectiveness of the notice in the

consent of the secured following cases:
creditor; or i. All the obligations under
ii. By the grantor, if the changes the security agreement to
to the security interest which the registration relates
requires the grantor's have been performed and
consent. there is no commitment to
c. An amendment notice that adds make future advances;
collateral that is not proceeds must ii. The secured creditor has
be authorized by the grantor in agreed to release part of the
writing. collateral described in the
d. An amendment notice that adds a notice;
grantor must be authorized by the iii. The collateral described in
added grantor in writing. the notice includes an item or
e. An amendment notice shall be kind of property that is not a
effective only as to each secured collateral under
creditor who authorizes it. a security agreement
f. An amendment notice that adds between the secured creditor
collateral or a grantor shall be and the grantor;
effective as to the added collateral iv. No security agreement
or grantor from the date of its exists between the parties; or
registration. v. The security interest is
g. If a secured creditor assigns a extinguished in accordance
perfected security interest, an with the PPSA.
amendment notice may be
registered to reflect the H. Compulsory Amendment or Termination
assignment.||| By Court Order (PPSA, Sec. 42)
(a) The court may, on application by
E. Continuation of Notice (PPSA, Sec. 33) the grantor issue an order that the
a. The period of effectiveness of a notice be terminated or amended in
notice may be continued by accordance with the demand, which
registering an amendment notice order shall be conclusive and
that identifies the initial notice by its binding on the LRA: provided, that
registration number. the secured creditor who disagrees
b. may be registered only within 6 with the other
months before the expiration of the (b) The court may take any order it
effective period of the notice deems proper for the purpose of
giving effect to the order made
F. TERMINATION NOTICE (PPSA, Sec. 34) under the first paragraph.
a. The effectiveness of a notice may (c) The LRA shall amend or terminate
be terminated by registering a a notice in accordance with a court
termination notice that: order as soon as reasonably
i. Identifies the initial notice by practicable after receiving the
its registration number; and order.
ii. Identifies each secured
creditor who authorizes the RIGHTS OF THE GRANTOR
registration of the termination 1. Right to disclosure of information from
notice. secured creditor
b. A termination notice terminates a. The secured creditor must provide to
effectiveness of the notice as to the grantor at its request:
each authorizing secured creditor. i. The current amount of the unpaid
secured obligation; and
G. When the Grantor May Demand ii. A list of assets currently subject to
Amendment or Termination of a Notice a security interest. (R.A. 11057,
(PPSA, Sec. 39 and Rules, Sec. 5.13) Section 37[a])
a. A grantor may give a written 2. Right to demand amendment or termination
demand to the secured creditor for of notice
the amendment or termination of
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3. Right to notification to dispose collateral valid obligation. (Art. 2052 & 2086; Manila Surety &
from the secured creditor Fidelity Co. v. Velayo, G.R. No. L-21069)
4. Right of redemption
What kinds of obligations do mortgages secure?
RIGHTS OF THE SECURED CREDITOR A contract of mortgage may secure all kinds of
1. Right to require payment for a fee for a obligation, be they pure or subject to a suspensive or
request of disclosure of information from the resolutory condition.
grantor
a. The secured creditor may require What is the effect of a promise to constitute a
payment of a fee for each request mortgage?
made by the grantor, but the grantor is A promise to constitute a mortgage gives rise only to
entitled to a reply without charge once a personal right binding upon the parties and
every six (6) months. However, creates no real right in the property. What exists is
secured creditor shall not charge any only a right of action to compel the fulfillment of the
fee for compliance with a demand promise, but there is no mortgage yet.
received under Section 39.
2. Right to take over enforcement Q: Can X, as a co-owner, mortgage such real
3. Right to expedite repossession of the property?
collateral A: X as a co-owner of the mortgaged property could
4. Right to recover in special cases validly convey through sale or mortgage the portion
5. Right to dispose of Collateral belonging to her. Under Art. 493 of the Civil Code, the
6. Right to retain collateral effect of the alienation or mortgage, with respect to
the co-owners, shall be limited to the portion which
B. REAL ESTATE MORTGAGE may be allotted to him in the division upon the
termination of the co-ownership. (Bulatao v.
What is a Real Estate Mortgage? Estonactoc, G.R. No. 235020, 2019)
Real [Estate] Mortgage is a contract whereby the
debtor secures to the creditor the fulfillment of a What is the effect of the invalidity of the mortgage
principal obligation, specially subjecting to such on the principal obligation?
security immovable property or real rights over The principal obligation remains valid and the deed
immovable property in case the principal obligation is of mortgage remains as the evidence of the personal
not complied with at the time stipulated. (Arts. 2124- obligation. (Rural Bank of Cabadbaran, Inc. v.
2131) Melecio-Yap, G.R. No. 178451, 2014)
Elements of a Valid Mortgage (FAVFAP) Q: Petitioners X and Y owned a parcel of land. In

1. Valid obligation exists; 1987, they each obtained a loan from
2. Constituted to secure the Fulfillment of a respondents Z and used their land as collateral
principal obligation; for the loan obligation. Z immediately began
3. Mortgagor be the Absolute owner of the occupying the land. In 2003, X obtained an
thing pledged or mortgaged; additional loan and in 2004, Y did the same. Later
4. Mortgagor has Free disposal of the in 2004, X and Y informed Z of their intent to
property, and in the absence thereof, that redeem their property. Z, however, refused,
he be legally authorized for the purpose; forcing X and Y to file a Complaint for redemption
5. When the principal obligation becomes due, of mortgaged properties in 2005. Z claims that X
the thing in which the mortgage consists and Y sold the property to them under a
may be Alienated for the payment to the Memorandum of Deed of Sale with Right of
creditor; and Repurchase. Both the RTC and CA found that the
6. Appears in a Public document duly transaction was an equitable mortgage but that
recorded in the Registry of Property to be the period for redemption had lapsed. Was the
[validly constituted]. contract an equitable mortgage? Can X and Y still
NOTE: If the instrument is not recorded, the redeem the property?
mortgage is nevertheless binding between
the parties. A: The contract was an equitable mortgage. There is
no conclusive test to determine whether a deed
Can a mortgage be constituted without any prior absolute on its face is really a simple loan
principal obligation? accommodation secured by a mortgage. The
No. A Mortgage, being a purely accessory decisive factor in evaluating such deed is the
contract, like a guarantee cannot exist without a intention of the parties as shown by all the
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surrounding circumstances. When in doubt, courts 5. Proceeds of insurance should the property
are generally inclined to construe a transaction be destroyed.
purporting to be a sale as an equitable mortgage, 6. Expropriation value of the property should it
which involves a lesser transmission of rights and be expropriated. (Art. 2127 of the Civil Code)
interests over the property in controversy. The
nomenclature given by the parties to the contract is To exclude them, it is necessary that there be an
not conclusive of its nature. In this case, the factual express stipulation. But if the mortgaged estate
findings of the RTC and CA regarding the equitable passes into the hands of a third person, the mortgage
mortgage attained finality as Z never challenged the does not extend to any machinery, object, chattel or
same. construction which he may have brought or placed
there and which such third person may remove
Yes. An equitable mortgage was a mere accessory whenever it is convenient for him to do so.
contract to secure the fulfilment of the payment of the
loan. Because the transaction was not a sale with What is a dragnet clause?
right of repurchase, there is no redemption period to It is one which is specifically phrased to subsume all
speak of, merely the prescriptive period under Article debts of past or future origins. A mortgage which
1144 of the Civil Code. Parties would have 10 years provides a dragnet clause is in the nature of a
from the time the cause of action accrued to file the continuing guaranty and constitutes an exception
appropriate action. X and Y’s cause of action to to the rule that an action to foreclose a mortgage
recover the subject property can only have accrued must be limited to the amount mentioned in the
in 2004, when Z rejected X and Y’s attempt to recover mortgage contract. (PCSO vs. New Dagupan Metro
the mortgaged property, and not in 1987, when the Gas Corp., G.R. No. 173171, 2012)
contract was executed. Therefore, the filing of the
complaint in 2005 was made well within the 10-year In the absence of clear and supportive evidence of a
prescriptive period. (Saclolo v. Marquito, G.R. No. contrary intention, a mortgage containing a dragnet
229243, June 26. 2019) clause will not be extended to cover future advances,
unless the document evidencing the subsequent
Can future property be the object of a mortgage? advance refers to the mortgage as providing security
a) As a general rule, it cannot. (Dilag v. Heirs therefor.
of Resurreccion, G.R. No. 48941)
i. In order to bring future property Mortgage Liability
within the coverage of the • General Rule: a mortgage liability is
mortgage, the mortgagor must usually limited to the amount mentioned in
execute a mortgage supplement the contract
after the mortgagor acquires • However, the amounts named as
ownership of the properties or after consideration in a contract of mortgage do
those properties come into not limit the amount for which the mortgage
existence. They must be registered may stand as security if from the four
with the relevant Register of Deeds. corners of the instrument the intent to secure
b) However, a stipulation subjecting to the future and other indebtedness can be
mortgage lien, improvements which the gathered. (Ramos vs. PNB, G.R. No.
mortgagor may subsequently acquire, 178218, 2011)
install, or use in connection with the real
property already mortgaged belonging to the Distinguish a dragnet clause from an
mortgagor is valid. (People’s Bank and Trust acceleration clause.
Co. v. Dahican Lumber Co., G.R. No. L- DRAGNET CLAUSE ACCELERATION
17500, 1967) CLAUSE
It is a stipulation in a It is a stipulation stating
What is the extent of a mortgage over an REM contract that that, on the occasion of
immovable property? extends the the mortgagor’s default in
A real estate mortgage constituted on immovable coverage of a paying an installment of a
property is not limited to the property itself but also mortgage to debt, the whole sum that
extends to its: advances or loans remains unpaid
1. Accessions other than those automatically becomes
2. Improvements already obtained or due and payable. (Luzon
3. Growing fruits specified in the Development Bank v.
4. Rents or income contract. A dragnet Conquilla, 2005)
clause may refer to
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past or future debts. NOTE: A foreclosure sale retroacts to the date of

(Paradigm registration of the mortgage. Thus, a person who
Development Corp. of takes a mortgage in good faith and for valuable
the Philippines v. consideration, the record showing clear title to the
Bank of the Philippine mortgagor, will be protected against equitable claims
Islands, 2017) on the title in favor of third persons of which he had
no actual or constructive notice. (St. Dominic Corp.,
What is the reliance on the security test? vs. IAC, G.R. Nos. 70623 & L-48630, 1987)
This test applies when there is a dragnet clause in a
mortgage contract but there is a mortgage Can mere inadequacy of the price nullify a
constituted on another property to secure a foreclosure sale?
subsequent loan. No. Mere inadequacy of the price obtained at the
sheriff’s sale will not be sufficient to set aside the sale
It applies in a situation where there are several unless “the price is so inadequate as to shock the
obligations and several collaterals. When the conscience of the court” taking into consideration the
mortgagor takes another loan for which another peculiar circumstances attendant thereto. (Sulit vs.
security was given it could not be inferred that such CA, G.R. No. 119247, 1997).
loan was made in reliance solely on the original
security with the "dragnet clause," but rather, on the Note: The lower purchase price may be beneficial to
new security given. Since there is a different security the mortgagor in exercising the right to redemption,
was taken for the second loan, it cannot be because the redemption price is based on the
inferred that parties intended to rely on the first purchase price plus interest.
security for the first loan. The "dragnet clause" in
the first security instrument constituted a Can the accessions of the property also be
continuing offer by the borrower to secure further foreclosed?
loans under the security of the first security Yes. Absent an adverse claimant or any evidence to
the contrary, all accessories and accessions accruing
instrument, and that when the lender accepted a
or attached to the mortgaged property are included in
different security he did not accept the offer. (See
the mortgage contract and may thus also be
Prudential Bank v. Alviar, G.R. No. 150197, 2005)
foreclosed with the principal property in the case of
nonpayment of the debt secured. (PNB vs. Maranon,
Can the mortgage credit be alienated or
G.R. No. 189316, 2013)
assigned?
Yes, and this may be done by the mortgagee without
What is the prescriptive period to recover the
the consent of the debtor, except if there is a
deficiency after foreclosure?
stipulation against alienation. Alienation of the
The action to recover a deficiency prescribes after 10
mortgage credit is valid even if it is not registered.
years from the time the right of action accrues
Registration is necessary only to affect third persons.
(Arts.1142 & 1144)
(Art. 2128)
When does the right to file an action for collection
Note that the sale or transfer of the mortgaged
of debt or foreclosure accrue?
property cannot affect or release the mortgage; thus,
In order that the debtor may be in default, it is
the purchaser or transferee is necessarily bound to
necessary that:
acknowledge and respect the encumbrance. (Garcia
a) the obligation be demandable and already
vs. Villar, G.R. No. 158891, 2012)
liquidated;
b) the debtor delays performance; and
Can the collateral be alienated during the
c) the creditor requires the performance
mortgage?
judicially or extrajudicially (unless demand is
Yes. The law considers void any stipulation
not necessary).
forbidding the owner from alienating the
immovable mortgaged. (Art. 2130)
Thus, default only arises when demand to pay is
unnecessary, or when such demand is required and
What is the concept of foreclosure?
made by the mortgagee but is refused by the
Foreclosure is the remedy available to the mortgagee
mortgagor. Hence, it is at this point where the
by which he subjects the mortgaged property to the
mortgagee obtains the right to file an action to collect
satisfaction of the obligation to secure which the
the debt or foreclose the mortgage. (Maybank
mortgage was given.
Philippines., Inc. v. Spouses Tarrosa, G.R. No.
213014, 2015)
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4. Application of proceeds of sale to:

Can the remedies be availed of a. Costs of the sale
simultaneously? b. Amount due the mortgagee;
The remedies of collection and foreclosure are c. Claims of junior encumbrances or
mutually exclusive, which means that the invocation persons holding subsequent
or grant of one remedy precludes the other. Both mortgages in the order of their
demands for the payment of the debt and the priority; and
foreclosure of the mortgage arise from a single cause d. The balance, if any, shall be paid to
of action. Though the debt and the mortgage the mortgagor.
constitute separate agreements, the latter is 5. Sheriff’s Certificate of sale is executed,
subsidiary to the former, and both refer to one and acknowledged and recorded to complete the
the same obligation. Consequently, there exists only foreclosure.
one cause of action for a single breach of that
obligation. (Pineda v. De Vega, G.R. No. 233774, What is the nature of Extra-judicial Foreclosures?
2019) Extra-judicial Foreclosures are governed by Act No.
3135, as amended.
What is the rule with respect to the family home?
The family home is exempt from execution, forced The following are the characteristics of the same:
sale or attachment, except for debts secured by 1. Express authority to sell is given to the
mortgages on the premises before or after such mortgagee;
constitution. (Art. 155, Family Code; Fortaleza vs. 2. Authority is not extinguished by death of
Lapitan, G.R. No. 178288, 2012; Parcon-Song v mortgagor or mortgagee;
Parcon, G.R. No. 199582. July 7, 2020) 3. Public sale should be made after proper
notice (posting and publication);
What is the rule with respect to foreclosure of 4. Surplus proceeds of foreclosure sale belong
mortgages over loans granted by Rural Banks? to the mortgagor or his assigns;
Under the Rural Banks Act, the foreclosure and 5. Debtor has the right to redeem the property
executions of judgments thereon involving real sold. Debtors who are natural persons can
properties levied upon by a sheriff shall be exempt redeem within 1 year from registration of the
from publication where the total amount of the loan, certificate of sale with the Register of Deeds.
including interests due and unpaid, does not exceed Debtors who are juridical persons can
P10,000.00. (Menzon v. Rural Bank of Buenavista, redeem within 3 months from foreclosure
Inc., G.R. 178031, 2013) sale or before registration of the certificate of
sale with the Register of Deeds, whichever
What is judicial foreclosure and what is the is first. (Section 47 of RA 8791 or the
procedure for such? General Banking Law of 2000)
It is the judicial action instituted in the proper court 6. Remedy of party aggrieved by foreclosure is
which has jurisdiction over the area wherein the real a petition to set aside sale and cancellation
property involved or a portion thereof is situated. It is of writ of possession;
quasi in rem in nature and survives the death of the 7. Republication is necessary for the validity of
mortgagor. (Rule 68, Rules of Court) a postponed foreclosure sale (parties have
no right to waive the publication
The followings steps illustrate judicial foreclosure: requirement).
(Rule 68)
1. Court orders mortgagor to pay the mortgage NOTE: Unless the parties stipulate, personal notice
debt with interest and other charges within a to the mortgagor in extrajudicial foreclosure
period of not less than 90 days nor more proceedings is not necessary because Section 31 of
than 120 days from the entry of judgment; Act No. 3135 only requires posting of the notice of
and a sale will be conducted and the sale in three public places and the publication of that
property will be awarded to the highest notice in a newspaper of general circulation.
bidder at public auction, should the (Ramirez v. TMBC, G.R. No. 198800, 2013)
mortgagor fail to pay at the time directed;
2. The sale will be confirmed. This operates to NOTE: Extra-judicial foreclosure before a notary
divest the rights of all parties in the action public is valid under Act No. 3135. (Tagunicar v.
and to vest their rights to the purchase, Lorna Express,G.R. No. 138592, 2006).
subject to the right of redemption allowed by
law. What is the procedure for Extra-judicial
3. The judgement will be executed. Foreclosure?
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Procedure for Extra-judicial Foreclosure of Real provision expressly or impliedly prohibiting recovery.
Estate Mortgage (Act No. 3135)(Act No. 1508, A.M. (BPI vs. Avenido, G.R. No. 175816, 2011)
N0. 99-10-05-0; January 15, 2000) (ARC-DIP-RET)
1. Filing of Application before the Executive What happens if the property is not redeemed?
Judge through the Clerk of Court; After the expiration of the redemption period without
2. Clerk of Court will examine whether the redemption having been made by petitioner,
Requirements of the law have been respondent became the owner thereof and
complied with, that is, whether the notice of consolidation of title becomes a right. Being already
sale has been posted for not less than 20 then the owner, respondent became entitled to
days in at least 3 public places of the possession. Petitioner already lost his possessory
municipality or city where the property is right over the property after the expiration of the said
situated, and if the same is worth more than period. (Spouses Gatuslao v. Yanson, G.R. No.
P400.00, that such notice has been 191540, 2015)
published once a week for at least 3
consecutive weeks in a newspaper of Is the stipulation of an Upset Price or “tipo”
general circulation in the city or municipality; allowed?
3. The Certificate of sale must be approved by No. A stipulation of minimum price at which the
the Executive Judge; property shall be sold to become operative in the
4. In extrajudicial foreclosure of real mortgages event of a foreclosure sale at public auction is null
in Different locations covering one and void, for the property must be sold to the highest
indebtedness, only one filing fee bidder. (de Leon & de Leon, Jr, citing Banco Espanol
corresponding to such debt shall be Filipino v. Donaldson, 5 Phil. 418)
collected;
5. The Clerk of Court shall Issue certificate of What is the effect of inadequacy of price in a
payment indicating the amount of foreclosure sale?
indebtedness, the filing fees collected, the 1. Where there is Right to Redeem.
mortgages sought to be foreclosed, the 1. General rule: Inadequacy of price is
description of the real estates and their immaterial because the judgment debtor
respective locations; may redeem the property.
6. The notice of sale shall be Published in a 2. Exception: The price is so inadequate as
newspaper of general circulation; to shock the conscience of the court taking
7. The application shall be Raffled among all into consideration the peculiar
sheriffs; circumstances. The sale will be set aside.
8. After the redemption period has Expired, the 2. Property may be sold for less than its fair
Clerk of Court shall archive the records; and market value upon the theory that the lesser the
9. Previously, the rule was that no auction sale price the easier for the owner to redeem.
shall be held unless there are at least Two
participating bidders, otherwise the sale The value of the mortgaged property has no bearing
shall be postponed to another date. If on the on the bid price at the public auction, provided that
new date there shall not be at least 2 the public auction was regularly and honestly
bidders, the sale shall then proceed. The conducted.
names of the bidders shall be reported by
the Sheriff or the Notary Public who Can the creditor waive the security?
conducted the sale to the Clerk of Court 1. The Mortgagee may waive right to foreclose
before the issuance of the certificate of sale. his mortgage and maintain a personal action
On January 30, 2001, the Supreme Court for recovery of the indebtedness.
issued a resolution amending paragraph 5 of 2. Remedies are alternative, not cumulative.
A.M. 99-10-05-0 explicitly dispensing with 3. Options of the mortgagee in case the debtor-
the "two-bidder rule." mortgagor dies:
a. To waive mortgage and claim
Can the mortgagee recover the deficiency? entire debt from the mortgagor’s
It is settled that if the proceeds of the sale are estate as an ordinary claim;
insufficient to cover the debt in an extrajudicial b. To judicially foreclose mortgage
foreclosure of mortgage, the mortgagee is entitled to and prove any deficiency; or
claim the deficiency from the debtor. While Act. No. c. To rely on the mortgage
3135 does not discuss the mortgagee’s right to exclusively without filing a claim
recover the deficiency, neither does it contain any for deficiency
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What is redemption? release 40k due to CB restrictions.

Redemption is a transaction by which the mortgagor The Court held that the bank can
reacquires or buys back the property which may have only foreclose on 50% of the
passed under the mortgage or divests the property of mortgaged land (50 hectares)
the lien which the mortgage may have created. (Central Bank v. CA, G.R. No. L-
45710, 1985)
What are the Kinds of Redemption? 3. Where there was failure of consideration.
1. Equity of redemption: Right of the The rule that real property, consisting of several lots
mortgagor to redeem the mortgaged which should be sold separately, applies to sales in
property after his default in the performance execution, and not to foreclosure of mortgages.
of the conditions of the mortgage but before
confirmation of the sale Does the placing of multiple mortgages in one
a. Applies to judicial foreclosure of document make an indivisible whole?
real mortgage and chattel mortgage The mere embodiment of a real estate mortgage and
foreclosure. a chattel mortgage in one document does not have
b. A second mortgagee acquires only the effect of fusing both securities into an indivisible
the equity of redemption vested in whole. (PBCOM v. Macadaeg, 109 Phil. 981 (1960))
the mortgagor, and his rights are
strictly subordinate to the superior Does the Doctrine of Indivisibility of Mortgage
lien of the first mortgagee. still apply once the mortgage has been
c. NOTE: Redemption of property extinguished by foreclosure?
where the mortgagee is a banking The doctrine of indivisibility of mortgage does not
institution is allowed within 1 year apply once the mortgage is extinguished by a
from the date of the registration of complete foreclosure thereof. Nothing in the law
the confirmation of sale. prohibits the piecemeal redemption of properties sold
2. Right of redemption: right of the mortgagor at one foreclosure proceedings. (Yap vs. Dy, Sr.,
to redeem the property within a certain G.R. Nos. 171868 & 171991, 2011).
period after it was sold for the satisfaction of
the debt How should redemption be performed?
a. Applies only to extrajudicial The general rule in redemption is that it is not
foreclosure of real mortgage. sufficient that a person offering to redeem manifests
b. EXC: The right of redemption is his desire to do so; The statement of intention must
also available in judicial be accompanied by an actual and simultaneous
foreclosure, in cases where the tender of payment; In case of disagreement over the
mortgagee is a bank. (Section 47 of redemption price, the redemptioner may preserve his
RA 8791 or the General Banking right of redemption through judicial action, which in
Law of 2000) every case, must be file within the one-year period of
c. NOTE: The right of redemption, as redemption. (Torbela vs. Rosario, G.R. Nos. 140528
long as within the period & 140553, 2011)
prescribed, may be exercised
irrespective of whether or not the
mortgagee has subsequently
conveyed the property to some
other party (Sta. Ignacia Rural
Bank, Inc. v. CA, G.R. No. 97872,
1994)
What is the Doctrine of Indivisibility of Mortgage?

Mortgage is indivisible.
Exceptions:
1. Where each one of several things guarantee
a determinate portion of credit.
2. Where only portion of loan was released.
a. Example: X borrowed 80k from the
bank and he mortgaged his 100 ha.
property. Lender was only able to
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What are the statutory periods of redemption?

PERIODS OF EXTRAJUDICIAL FORECLOSURE JUDICIAL FORECLOSURE
REDEMPTION (Act no. 3135)
BANKS NON-BANKS BANKS NON-BANKS
Individual debtors / 1 year from 1 year from registration of 1 year from N/A [Equity of
mortgagors registration of the the certificate of sale with registration of the Redemption
certificate of sale Registry of Deeds. certificate of sale Only]
with Registry of with Registry of
Deeds. Deeds.
Juridical persons 3 months after 1 year from registration of 1 year from N/A [Equity of
as debtors / foreclosure or the certificate of sale with registration of the Redemption
mortgagors before registration Registry of Deeds. certificate of sale Only]
of certificate of with Registry of
foreclosure Deeds.
whichever is
earlier (General
Banking Law,
Sec. 47)
The right of legal redemption must be exercised What are Junior Mortgagees?
within specified time limits. However, the statutory After the foreclosure sale, there remains in the
period of redemption can be extended by agreement second mortgagee a mere right of redemption. His
of the parties. (Republic vs. Marawi-Marantao remedy is limited to the right to redeem by paying off
General Hospital, G.R. No. 158920, 2012) the debt secured by the first mortgage.
He is entitled to the payment of his credit the excess
As a rule, the period of redemption is not tolled by of the proceeds of the auction sale.
the filing of a complaint or petition for annulment of In case the credit of the first mortgagee has
the mortgage and the foreclosure sale conducted absorbed the entire proceeds of the sale, the
pursuant to the said mortgage. second mortgage is extinguished, since the
How do you determine the Redemption Price? mortgage cannot be enforced beyond the total value
1. Mortgagee is not a bank (Act No. 3135 in of the mortgaged property.
relation to Sec. 28, Rule 39 of Rules of Court)
a. Purchase price of the property; What is a Mortgagee in Possession?
b. 1% interest per month on the purchase One who has lawfully acquired actual or
price; constructive possession of the premises mortgaged
c. Taxes paid and amount of purchaser’s to him, standing upon his rights as mortgagee and
prior lien, if any, with the same rate of not claiming under another title, for the purpose of
interest computed from the date of enforcing his security upon such property or making
registration of sale, up to the time of its income help to pay his debt.
redemption.
2. Mortgagee is a bank (Section 47, General The rights of the first mortgage creditor or mortgage
Banking Act of 2000) over the mortgaged properties are superior to those
a. Amount due under the mortgage deed; of a subsequent attaching creditor and other junior
b. Interest at the rate specified in mortgage; mortgagees. (Lee vs. Bangkok Bank Public
c. Cost and expenses incurred by bank from Company, Ltd. G.R. No. 173349, 2011)
sale and custody less income derived
NOTE: Redemption price in this case is reduced by What are the Rights and Obligations of the
the income received from the property. Mortgagee in Possession?
1. Similar to an antichresis creditor – entitled
to retain such possession until the
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indebtedness is satisfied and the property foreclosure sale arising therefrom are given effect
redeemed. by reason of public policy; Even if the mortgagor is
2. Without right to reimbursement for useful not the rightful owner of, or does not have a valid
expenses title to, the mortgaged property, the mortgagee in
good faith is, nonetheless, entitled to protection.
What is a Writ of Possession? (Torbela vs. Rosario, G.R. Nos. 140528 &140553,
Order whereby the sheriff is commanded to place in 2011)
possession of real or personal property the person
entitled thereto such as when a property is When a mortgagee relies upon what appears on the
extrajudicially foreclosed. face of a Torrens title and lends money in all good
faith on the basis of the title in the name of the
The issuance of the writ of possession in an mortgagor, only thereafter to learn that the latter’s
extrajudicial foreclosure is merely a ministerial title was defective, being thus an innocent
function. The purchaser at the foreclosure sale is mortgagee for value, his or her right or lien upon the
entitled as of right to a writ of possession. land mortgaged must be respected and protected.
(Mahinay vs. Gako, Jr., G.R. Nos. 165338 &
Before lapse of redemption period – file an ex 179375, 2011)
parte application and file a bond
After lapse of redemption period – file an ex parte BUT: A bank whose business is impressed with
application and no need for a bond (PBCom v. public interest is expected to exercise more care
Yeung, G.R. No. 179691, 2013) and prudence in its dealings than a private
individual, even in cases involving registered lands.
“Purchaser at the auction sale concerned whether in A bank cannot assume that, simply because the title
a judicial or extrajudicial foreclosure shall have the offered as security is on its face free of any
right to enter upon and take possession of such encumbrances of lien, it is relieved of the
property immediately after the date of the responsibility of taking further steps to verify the title
confirmation of the auction sale and administer the and inspect the properties to be mortgaged.
same in accordance with law. Any petition in court
to enjoin or restrain the conduct of foreclosure In order for a mortgagee to invoke the doctrine of
proceedings instituted pursuant to this provision mortgagee in good faith, the impostor must have
shall be given due course only upon the filing by the succeeded in obtaining a Torrens title in his name
petitioner of a bond in an amount fixed by the court and thereafter in mortgaging the property. Where
conditioned that he will pay all the damages which the mortgagor is an impostor who only pretended to
the bank may suffer by the enjoining or the restraint be the registered owner, and acting on such
of the foreclosure proceeding.” (The General pretense, mortgaged the property to another, the
Banking Law of 2000, Section 47) mortgagor evidently did not succeed in having the
property titled in his or her name, and the mortgagee
What is the distinction between Redemption and cannot rely on such pretense as what appears on
Repurchase? the title is not the impostor's name but that of the
The right to redeem becomes functus oficio at the registered owner. (Ruiz v. Dimailig, G.R. No.
end of the redemption period, and its exercise after 204280, 2016)
the period is not really one of redemption but a
repurchase. Distinction must be made because BUT: SC has held in a case that while the bank
redemption is by force of law; the purchaser at failed to exercise greater care in conducting the
public auction is bound to accept redemption. ocular inspection of the properties offered for
Repurchase however of foreclosed property, after mortgage, its omission did not prejudice any
redemption period, imposes no such obligation. innocent third parties because the cause of the
After expiry, the purchaser may or may not re-sell mortgagors' defective title was the simulated sale
the property but no law will compel him to do so. between the buyer/mortgagor and seller (the latter
And, he is not bound by the bid price; it is entirely questioning the validity of the mortgage). Thus, no
within his discretion to set a higher price, for after all, amount of diligence in the conduct of the ocular
the property already belongs to him as owner. inspection could have led to the discovery of the
complicity between the ostensible mortgagors/buyer
What is the Doctrine of Mortgagee in Good and the true owners/seller. In fine, the bank can
Faith? hardly be deemed negligent. Thus, the bank was
Under the Doctrine of “Mortgagee in Good Faith”, considered as a mortgagee in good faith (Philippine
even if the mortgagor is not the owner of the Banking Corporation v. Dy, G.R. No. 183774, 2012)
mortgaged property, the mortgage contract and any
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ALSO: SC has held that a bank should not What are the Essential Requisites Common to
necessarily be made liable if it did not investigate or Mortgage Contracts? (FARVAS)
inspect the property. If the circumstances reveal that 1. Constituted to Secure the fulfillment of a
an investigation would still not yield a discovery of principal obligation;
any anomaly, or anything that would arouse 2. Mortgagor be the Absolute owner of the
suspicion, the bank should not be liable. Such is the thing mortgaged;
case when the TCT is clean, bearing no annotations 3. The persons constituting the mortgage
evidencing any trust, lien, or encumbrance on the have the Free disposal of their property,
property, not forged or fake. There is also no and in the absence thereof, that they be
showing that the bank was aware of any defect or legally authorized for the purpose;
any other conflicting right on the title when the 4. Cannot exist without a Valid obligation;
property was mortgaged to it. In fact, the 5. Debtor Retains the ownership of the thing
investigation of the property would still fail to bring given as a security; and
any doubt as to the validity of the TCT (i.e., the title 6. When the principal obligation becomes
owners were in actual possession of the property). due, the thing in which the mortgage
(Parcon-Song v Parcon, G.R. No. 199582. July 7, consists may be Alienated for the payment
2020) to the creditor.
NOTE: Third persons who are not parties to the
Can an entrustee mortgage property held in principal obligation may secure the latter by
trust? mortgaging their own property (Art. 2085;
An entrustee under a trust receipt does not have a Chinabank vs. QBRO Fishing Enterprises, G.R. No.
right to mortgage the property held in trust. This is 184556, 2012)
because the entrustor, not the entrustee, is the
owner of the property in trust. A mortgage must be What are the rights of the Creditor where the
executed by the absolute owner of the chattels to be Debtor fails to comply with his obligation?
valid (DBP vs. Prudential Bank, 2005;Art. 2085 (2)). 1. Creditor is merely entitled to move for the
sale of the thing mortgaged with the
Can a person mortgage conjugal property formalities required by law in order to
without the consent of his or her spouse? collect.
Real estate mortgage over a conjugal property is 2. Creditor cannot appropriate to himself the
void if the non-contracting spouse did not give thing nor can he dispose of the same as
consent (PNB v. Venancio Reyes, Jr., G.R. No. owner.
212483, 2016)
Generally, mortgage of a conjugal property by one What are the requisites of Pactum
of the spouses without the consent of the other Commissorium?
spouse is valid only as to ½ of the entire property. 1. There should be a mortgage; and
2. There should be a stipulation for an
What is a Legal mortgage? automatic appropriation by the creditor of
The persons in whose favor the law establishes a the property in the event of
mortgage have no other right than to demand the nonpayment.(Pen v. Julian, G.R. No.
execution and the recording of the document in 160208, January 11, 2016)
which the mortgage is formalized.
What is the effect of Pactum Commissorium?
What are the incidents of Registration of Stipulation is null and void - stipulation where thing
Mortgage? mortgaged shall automatically become the property
1. Mortgagee entitled to registration of of the creditor in the event of nonpayment of the
mortgage as a matter of right. debt within the term fixed.
2. Proceedings for registration do not
determine validity of mortgage or its effect. The essence of pactum commissorium is that
3. Registration is without prejudice to better ownership of the security will pass to the creditor by
right of third parties. the mere default of the debtor. (Spouses Solitarios
4. Mortgage deed once duly registered forms v. Spouses Jaque, G.R. No. 199852, 2014)
part of the records for the registration of the
property mortgaged. Nullity of the stipulation does not affect validity and
5. Mortgage by surviving spouse of his/her efficacy of the principal contract.
undivided share of conjugal property can
be registered. -------- end of topic --------
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III. LAND TITLES & DEEDS

A. TORRENS SYSTEM; GENERAL
PRINCIPLES
A. TORRENS SYSTEM; GENERAL PRINCIPLES Torrens System

The Torrens System is a system of registration of
B. REGALIAN DOCTRINE transactions with interest in land the object of which
is, under governmental authority, to establish and
certify the ownership of an absolute and
C. ORIGINAL REGISTRATION
indefeasible title to realty, and to simplify its transfer.
1. Ordinary Registration
(Grey Alba v. De la Cruz, G.R. No. 5246, September
a. Who may apply
16, 1910 citing Hogg on Australian Torrens System.)
b. Decree of registration
c. Review of decree of registration;
innocent purchaser in value Title to real property
A title to real property is the evidence of the owner’s
D. CERTIFICATE OF TITLE right or extent of his interest, by which he can
maintain control and assert his right to exclusive
E. SUBSEQUENT REGISTRATION possession and enjoyment of the property.
1. Voluntary dealings (Evangelista v. Santiago, G.R. 157447, April 29,
2. Involuntary dealings 2005 citing Narciso Peña, et al., Registration of
a. Adverse claim Land Titles and Deeds 3 (1994 ed.))
b. Notice of lis pendens
Deed
F. NON-REGISTRABLE PROPERTIES A deed is an instrument in writing by which any real
estate or interest therein is created, alienated,
G. DEALINGS WITH UNREGISTERED LANDS mortgaged, or assigned, or by which title to any real
estate may be affected in law or equity.
H. ASSURANCE FUND
1. Action of compensation from funds Land registration
2. Limitation of Action Land registration is a judicial or administrative
proceeding whereby a person’s claim over a
I. CADASTRAL SYSTEM OF REGISTRATION particular land is determined and confirmed or
(Act No. 2259, as amended) recognized so that such land and the ownership
thereof may be recorded in a public registry.
J. REGISTRATION THROUGH
ADMINISTRATIVE PROCEEDINGS (C.A. Purposes of land registration under the Torrens
141, as amended) System
K. RECONSTITUTION OF TITLES (1) Quiet title to the land

. To quiet title to the land and to stop forever any
question as to the legality of said title, except claims
which were noted at the time of registration, in the
certificate, or which may arise subsequent thereto
- Relieves the land of unknown claims
- Gives every registered owner complete
peace of mind
(2) Guarantee the integrity of land titles

To guarantee the integrity of land titles and to
protect their indefeasibility once the claim of
ownership is established and recognized
(3) Avoid possible conflicts

To avoid possible conflicts of title to real property
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(4) Facilitate transactions relative thereto Laws governing land registration

To facilitate transactions relative thereto by giving 5. Property Registration Decree (P.D. 1529, as
the public the right to rely upon the face of a Torrens amended)
certificate of title and to dispense with the need of 6. Cadastral Act (Act 2259, as amended, now in
inquiring further, except when the party concerned Secs. 35 to 38, P.D. 1529)
has actual knowledge of facts and circumstances
7. Public Land Act (C.A. 141, as amended)
that should impel a reasonably cautious man to
make such further inquiry. (Sps. Peralta v. Heirs of 8. Indigenous Peoples’ Rights Act (R.A. 8371)
Abalon, G.R. No. 183448, June 30, 2014) 9. Emancipation Decree (P.D. 27, as amended)
10. Comprehensive Agrarian Reform Law of 1988
(5) Best evidence of ownership (R.A. 6657, as amended)
To issue a certificate of title to the owner which shall
be the best evidence of his ownership of the land Nature of land registration proceedings under
P.D. 1529
Registration of title distinct from acquisition 1. Judicial in character and not merely
The purpose of land registration is not the administrative
acquisition of lands but only the registration of title
2. A proceeding in rem
which the applicant already possessed over the
land. (Republic v. CA, G.R. Nos. L-43105, L-43190,
August 31, 1984) Judicial in character
In a registration proceeding, the judgment of the
Registration under the Torrens System does not court confirming the title, and ordering its
create or vest title registration in one’s name constitutes, when final,
res judicata against the whole world. (Ronald Ting
Registration under the Torrens system, not being a
v. Heirs of Lirio, G.R. No. 168913, March 14, 2007)
mode of acquiring ownership, does not create or
vest title. The Torrens certificate of title is merely an
A proceeding in rem
evidence of ownership or title in the particular
property described therein. (Casimiro Development In land registration proceedings, being in rem, there
Corporation vs. Mateo, G.R. No. 175485, July 27, is no need to personally notify the owners or
2011) claimants of the land sought to be registered to vest
the courts with power and authority over the res.
(Guido-Enriquez v. Victorino, et al., G.R. No.
Securing a title in one’s own name does not operate
180427, September 30, 2013)
to vest ownership upon him of the subject land. A
certificate of title is merely an evidence of ownership
Administration of the Torrens System
or title over the particular property described therein.
It cannot be used to protect a usurper from the true 1. Land Registration Authority (LRA)
owner; nor can it be used as a shield for the Agency charged with the efficient execution
commission of fraud; neither does it permit one to of the laws relative to the registration of lands,
enrich himself at the expense of others. Its issuance under the executive supervision of the DOJ.
in favor of a particular person does not foreclose the (P.D. 1529, § 4)
possibility that the real property may be co-owned
with persons not named in the certificate, or that it 2. Register of Deeds (ROD)
may be held in trust for another person by the The office of the ROD is the public repository
registered owner. (Ulay v. Bustamante, GR 231721 of records and instruments affecting
& 231722, March 18, 2021) registered or unregistered lands and chattel
mortgages in the province or city wherein
The inclusion of areas in excess of the original area such office is situated. (P.D. 1529, § 10)
as reflected in TCT No. 722 and in subsequent
certificates of title did not vest any right of private Functions of the LRA: (SAC)
ownership because, as mentioned in the CA 1. Extend Speedy and effective assistance to
Decision and confirmed by jurisprudence that it the Dept. of Agrarian Reform, the Land Bank,
cited, registration of lands under the Torrens system and other agencies in the implementation of
is not a mode of acquiring ownership. (Belizario v. the land reform program of the government;
Department of Environment and Natural Resources,
2. Extend Assistance to courts in ordinary and
G.R. No. 231001 (Resolution), March 24, 2021)
cadastral land registration proceedings; and
3. Be the Central repository of records
relative to original registration of lands titled
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under the Torrens system, including the Instances when the ROD may validly deny
subdivision and consolidation plans of titled registration of a voluntary instrument:
lands. (P.D. 1529, § 6(2)) 5) Where there is more than 1 copy of the owner’s
duplicate certificate of title and not all such
Functions of the ROD: (PRIDe) copies are presented to the ROD.(Balbin v.
1. Immediately Register an instrument ROD, G.R. No. L-20611, 1969);
presented for registration dealing with real or 6. Where the voluntary instrument bears on its
personal property which complies with the face an infirmity (e.g., where the property is
requisites for registration; presumed to be conjugal but the instrument of
2. See to it that said instrument bears the Proper conveyance bears the signature of only one
documentary stamps and that the same are spouse);
properly cancelled; 7. Where the validity of the instrument sought to
3. If the instrument is not registrable, Deny the be registered is in issue in a pending court suit,
registration thereof and inform the presentor of notice of which must be given to parties;
such denial in writing, stating the ground or 8. Where required certificates or documents such
reason therefore, and advising him of his right as DAR clearance, copy of latest tax
to appeal by consulta in accordance with Sec. declaration, are not submitted
117 of P.D. 1529; and
4. Prepare and keep an Index system which Note: Any disposition of private agricultural
contains the names of all registered owners and lands made prior to June 15, 1988, when RA
lands registered in their names. (P.D. 1529, § 6657 took effect, must be registered within 3
12) months from said date or on or before
September 13, 1988 to be valid. (R.A. 6557,
Function of ROD ministerial in character § 6) Thus, on this ground, the proper DAR
The function of the ROD with reference to clearances must first be secured.
registration of deeds, encumbrances, instruments,
and the like is ministerial in nature, provided the 9. Where the transfer/sale involves a total
applicant complies with all the requisites. (Baranda aggregate landholding of 5 has. and below of a
v. Gustilo, G.R. No. 81163, September 26, 1988) particular landowner and the transferee will not
own an aggregate of more than 5 has., the
Basic formal requirements of deeds and other
transfer is legal and proper but a DAR
voluntary instruments: (See P.D. 1529, § 112)
clearance is needed for the purpose of
1) In a public instrument
monitoring and as requisite for registration.
2) Signed by the person/s executing the same
(DAR Administrative Order No. 05-06)
3. Executed in the presence of least 2 witnesses
10. The ROD may also refuse to register a private
present who shall also sign the same
document since Section 112 of P.D. 1529
4. Acknowledged to be the free act and deed of
provided that deeds of conveyances affecting
the person/s executing the same before a
lands should be verified and acknowledged
notary public or other public officer authorized
before a notary public or other public officer
to take acknowledgement
authorized by law to take acknowledgement.
(Gallardo v. IAC, G.R. No. L-67742, 1987)
It is enough that in the ROD’s opinion, an instrument
is registrable for him to register it. The act being an
administrative act does not contemplate notice to In cases where the ROD is in doubt
and hearing of interested parties. (Ledesma v. When the ROD is in doubt as to the proper action to
Villaseñor, G.R. No. L-18725, March 31, 1965) take on an instrument or deed presented to him for
registration, he should submit the question to the
The determination of whether a document is valid or Administrator of the LRA en consulta. (P.D. 1529, §
not is a function that belongs to a court of competent 117)
jurisdiction and not to the ROD. (Almirol v. ROD of
Agusan, G.R. No. L-22486, March 20, 1968) General principles underlying the Torrens
System
1) The Torrens Certificate of Title is the best
evidence of ownership of the land.
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2. The Torrens Certificate of Title is a constructive and natural resources belong to the state. With the
notice to the whole world, and thus, binds the exception of agricultural lands, all other natural
whole world. resources shall not be alienated. (Sec. 2, Article XII,
3. Claims against the land prior to the issuance of 1987 Constitution)
the Torrens Certificate of Title that are not
The word “agricultural land” as used in the
noted on said title are quieted or barred.
constitutional provision is a generic term excluding
4. The Torrens Certificate of Title covering
timber and mineral land. It includes agricultural land
alienable land is indefeasible or incontrovertible proper as well as residential, industrial, and
after one year from the entry of the decree of commercial land.
registration.
5. The Torrens certificate of Title is Anyone who applies for confirmation of imperfect
imprescriptible. title has the burden of proof to overcome the
6. Every person dealing with registered land in presumption that the land sought to be registered
good faith and for value may not go beyond the forms part of public domain.
title but may safely rely on the correctness of
the Torrens Certificate of Title. To overcome this presumption, incontrovertible
evidence must be established that the land subject
7. The person who fraudulently registered the land
of the application is alienable or disposable.
in his name holds it as a mere trustee with the
obligation to reconvey the property and the title The Public Land Act or C.A. 141, until this day, is the
to the true owner. existing general law governing the classification and
8. As between two innocent persons, the one who disposition of lands of the public domain, except for
made it possible for the wrong to be done will timber and mineral lands. "Under the Regalian
bear the resulting loss. doctrine embodied in our Constitution, land that has
9. He who registers first is preferred in right not been acquired from the government, either by
insofar as the third persons are concerned. purchase, grant, or any other mode recognized by
10. Where two certificates of title include the same law, belongs to the State as part of the public
domain."(Republic v. Jaralve, G.R. No. 175177, Oct.
land, the certificate that is earlier in data prevail.
24, 2012 citing Republic v. Heirs of Juan Fabio, G.R.
No. 159589, Dec. 23, 2008)
In case land has been registered under the Land
Registration Act in the name of two different To prove that the land subject of the application for
persons, the earlier in date shall registration is alienable, an applicant must establish
prevail. (Macutay v. Samoy, G.R. No. 205559, the existence of a positive act of the government
December 2, 2020.) such as a presidential proclamation or an executive
order; an administrative action; investigation reports
11. A forged document of sale may become the of Bureau of Lands investigators; and a legislative
root of a valid title if the certificate of title has act or statute, and the applicant may also secure a
already been transferred from the name of the certification from the Government that the lands
true owner to the name of the forger or the applied for are alienable and disposable. (Aranda v.
name indicated by the forger before the Torrens Republic, G.R. 172331, 2011)
Certificate of Title is issued to the purchaser in
good faith and for value. When Conclusively Presumed to Have
12. Titles derived from a void title are also void. Performed All Conditions Essential to a
13. A certificate of title shall not be subject to Government Grant by Operation of Law
1) Those who by themselves or through their
collateral attack.
predecessors-in-interest have been in OPEN,
CONTINIOUS, EXCLUSIVE, AND
B. REGALIAN DOCTRINE
NOTORIOUS possession and occupation.
Regalian Doctrine 2) Land is of public domain and is alienable and
Under the Regalian doctrine, all lands of the public disposable.
domain belong to the State, which is the source of 3) Land is not covered by existing certificates of
any asserted right to ownership of land. All lands of title or patents under bona fide claim of
the public domain, waters, minerals, coal, petroleum ownership for at least 20 YEARS immediately
and other mineral oils, all forces of potential energy, preceding the filing of the application for
fisheries, forests, or timber, wildlife, flora and fauna,
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confirmation of title EXCEPT when prevented

by war or force majeure.
Effects
1. Shall be entitled to a certificate of title.
Deed of conveyance issued by government

patent/grant).
Registration with the ROD: mandatory, it is

the operative act to convey and transfer title.
2. Land ceases to be part of public domain &

ownership vests to the grantee.
3. Any further grant by Government on the same
land is null and void.
4. Title is indefeasible 1 YEAR after issuance of
the patent.
EXCEPTION: If title was secured by fraud and
misrepresentation. Well-settled is the doctrine
that the registration of a patent under the
Torrens System does not by itself vest title; it
merely confirms the registrant’s already
existing one.
Concept of Native Title; Time Immemorial

Native title refers to pre-conquest rights to lands
and domains which, as far back as memory
reaches, have been held under a claim of private
ownership by Indigenous Cultural
Communities/Indigenous Peoples (ICCs/IPs),
have never been public lands and are thus
indisputably presumed to have been held that
way since before the Spanish Conquest. (Sec.
3(L), Ch. III, R.A. 8371)
NOTE: The Regalian Doctrine does not negate

native title.
C. ORIGINAL REGISTRATION
Original Registration under P.D. 1529

A proceeding brought before the RTC (as a land
registration court) to determine title or ownership of
land on the basis of an application for registration or
answer by a claimant in a cadastral registration.
An Original Certificate of Title (OCT) is the first title

issued in the name of the registered owner by virtue
of judicial/voluntary or administrative/ involuntary
proceedings. (Salao, et al. v. Salao, G.R. No. L-
26699, Mar. 16, 1976.
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1. ORDINARY REGISTRATION
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Kinds of Registration where it is declared for taxation

1) Judicial/Voluntary/Ordinary – by filing with purposes.
the proper court; application by the private iii. When boundaries are definfed, a
individual himself separate plan for each portion
2) Administrative/Involuntary/Cadastral – must be made by a separate
compulsory registration initiated by the application for each lot must be
government filed with the appropriate RTC.
Procedure in Ordinary Land Registration 3) Setting of the Date of Initial hearing of

Proceedings application by the RTC
Under P.D. 1529 and C.A. 141, the following • Within 5 days from filing, initial hearing
requisites should all be satisfied: (SAD-TraPu- shall be held 45-90 days from date of
MAHP-FESE) order transmittal of the application and the
date of the initial hearing.
1) Survey of land by the Bureau of Lands or a
duly licensed private surveyor
4) Transmittal of the application and the date
• Survey plan must be duly approved by the
of the initial hearing, with all the documents
Director of Lands.
2) Filing of Application for registration by the
or other evidence attached thereto, by the
applicant together with all the muniments 2 of Clerk of Court to the LRA
titles and copies thereof with a survey plan 5) Publication of notice of initial hearing
approved by Bureau of Lands. The Clerk of (mandatory)
Court shall not accept any application unless it
is show that the applicant has furnished the - Once in the Official Gazette (OG) (this
Director of Lands with a copy of application and confers jurisdiction upon the court)
all annexes. - Once in a newspaper of general circulation
Where to File? Purposes and effects of publication:

a. MTC - To confer jurisdiction over the land applied
i. Application indorsed to the MTC if for upon the court
there is no controversy over the - To charge the whole world with knowledge
land or if its value is less than PHP of the application of the land involved, and
300,000/PHP400,000 (Metro invite them to take part in the case and
Manila). assert and prove their rights over the
ii. In cases of delegated jurisdiction subject land
to the MTC (Appeal is directed to
the CA). Effect of defective publication
b. RTC A defective publication of the notice of initial
hearing deprives the court of jurisdiction.
i. If there are several parcels of land
situated in different
Note: If it is shown that the decree of registration
provinces/cities but belong to one had included lands not included in the original
owner, he must file in the RTC of application as published, then the registration
each province where different proceedings are null and void insofar as the land
parcels of land are located for not included in the publication is concerned.
registration purposes. (Benin v. Tuason, G.R. No. L-26127, Jun.
ii. When the boundaries are not 28,1974)
defined with the RTC of the place
6) Mailing and posting of notice of initial hearing
2
NOTE: Muniments of title are instruments or written evidence
which the applicant holds or possesses to enable him to
substantiate and prove title to his estate. (e.g., Deed of
Sale/Donation/Assignment).
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Mailing When the State has no effective opposition,

Within 7 days after publication of said notice in except for a pro forma opposition, to controvert
the OG, the LRA shall mail notice to: an applicant's convincing evidence of
- Persons named in the notice possession and occupation, presumptions are
- Sec. of Public Highways, Provincial tilted to this applicant's favor. Therefore, when
Governor, and Mayor, if the applicant an applicant is shown to have been in open,
requests to have the line of a public continuous, exclusive, and notorious
way or road determined possession of a land for the period required by
law, he or she has acquired an imperfect title
- Sec. of Agrarian Reform, Solicitor
that may be confirmed by the State. The State
General, Director of Lands, Director of may not, for the simple reason that an applicant
Fisheries, and Director of Mines, if the failed to show documents which the State is in
land borders on a river, navigable the best position to acquire, indiscriminately
stream, or shore, or on an arm of the take an occupied property and unjustly and self-
sea where a river or harbor lies servingly refuse to acknowledge legally
- Other persons as the court may deem recognized rights evidenced by possession,
proper without violating due process.
Posting
Posting shall be made by the sheriff in a The burden of evidence lies on the party who
conspicuous place on the subject land and on asserts an affirmative allegation. Therefore, if
the bulletin board of the municipal building of the the State alleges that lands belong to it, it is not
municipality or city in which the land or portion excused from providing evidence to support this
thereof is situated, at least 14 days before the allegation. This specially applies when the land
date of initial hearing. in question has no indication of being incapable
of registration and has been exclusively
occupied by an applicant or his or her
7) Filing of Answer or Opposition to the
predecessor-in-interest without opposition —
application by any person whether named in not even from the State. (Republic of the
the notice or not (on or before the date of Philippines v. Spouses Noval, G.R. No. 170316,
initial hearing, or within such further time as September 18, 2017.)
may be allowed by the court.)
Effects of failure to file answer
Requisites of Opposition Absent any oppositor, the court will issue an
The oppositor (DIGS): order of default pursuant to Sec. 26 of P.D.
a. Must have an Interest in the land applied 1529.
for;
b. Should state the Grounds for his objection General vs. Special Default
GENERAL SPECIAL
as well as the nature of his claimed interest;
DEFAULT DEFAULT
c. Should indicate the Desired relief; and
Those persons who When a party appears
d. Should Sign and have the opposition did not appear and at initial hearing
sworn to by him or his duly authorized answer within the without having filed an
representative. time prescribed answer and asks court
for time to file answer
Note: The opposition must be filed on or before but failed to do so
the date of initial hearing. within period allowed
If only a portion of the land applied for is 8) Hearing of the case by the court
contested and such portion is not properly 9) Promulgation of judgment by the court
delimited, the court may require submission of a 10) Issuance of the order of Finality of judgment
division plan approved by the Director of Lands. and order instructing the LRA to issue a
Note: While the burden of proving that the
property is an alienable and disposable
agricultural land of the public domain falls on the
applicant, the Office of the Solicitor General has
the correlative burden to present effective
evidence of the public character of the land.
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decree 3 of confirmation and registration and What to Prove and Evidence to Submit
OCT. 1) Alienability and disposability of land
2) Identity of land
Note: The issuance of the decree of 3. A) Private ownership or B) open, continuous,
registration is not done by the court. exclusive, and notorious possession
What the court issues is the order of
finality of judgment and the order to the (1) Alienability and disposability of land
LRA to issue the decree. It is the LRA
How to prove:
which issues the decree as well as the
1) Certification from City Environment and Natural
original and owner’s duplicate of the Resources Office (CENRO) or Provincial
OCT. Environment and Natural Resources Office
(PENRO)
The Clerk of Court shall: - If land is less than 50 hectares – CENRO
1. Prepare and submit to the Judge for his Certification
signature, as soon as the Decision has - If land is 50 hectares or more – PENRO
become final, the corresponding order for
Certification; and
the issuance of the decree for all lots
2. Copy of the original classification of land as
covered by the decision from which no alienable and disposable approved by the
appeal has been interposed or on which no
DENR Secretary and certified as a true copy by
motion for new trial or reconsideration has
the legal custodian of the official records.
been filed; (Republic of the Philippines v. Santos, G.R. No.
2. Transmit immediately two certified copies 191516, Jun. 4, 2014.)
of all decisions, orders, resolution, minutes,
writs, notifications, and other processes Note: It is not enough for the PENRO or CENRO to
after their issuance by the Court to the LRA certify that a land is alienable and disposable. The
through registered mail with covering letter; applicant for land registration must prove that the
(Administrative Circular No. 7-96) DENR Secretary had approved the land
classification and released the land of the public
11) Entry of the decree of registration in the domain as alienable and disposable, and that the
land subject of the application for registration falls
LRA. One year after the date of entry of
within the approved area per verification through
decree, it becomes incontrovertible and survey by the PENRO or CENRO. (Espiritu v.
amendments will not be allowed except for Republic, G.R. No. 219070, Jun. 21, 2017 &
correcting clerical errors. It is deemed Republic v. Raneses, G.R. No. 189970, Jun. 9,
conclusive as to the whole world. 2014.)
- Puts an end to litigation In addition, the applicant for land registration must
- Purpose of Torrens system is protected present a copy of the original classification approved
by the DENR Secretary and certified as a true copy
12) Sending of the original and owner’s by the legal custodian of the official records. These
fact must be established to the prove the land is
duplicate OCT to the ROD of the city or
alienable and disposable. (Republic v. T.A.N
province where the property is situated for Properties, Inc., G.R. No. 154953, Jun. 26, 2008)
entry in his registration book.
13) Entry of OCT by the ROD in the Electronic A CENRO or PENRO certification alone is
Primary Entry Book for Registered Land and insufficient to prove the alienable and disposable
delivery of owner’s duplicate OCT to the nature of the land sought to be registered. It is the
applicant upon payment of the prescribed original classification by the DENR Secretary or the
fees.
3
NOTE: Decree – issued by LRA after finality of judgment;
contains technical description of land.
a. Decrees dismissing application
b. Decrees of confirmation and registration (Subject
only to appeal)
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President which is essential to prove that the land is possession. Alienable public land held by a
indeed alienable and disposable. possessor openly, continuously and exclusively
during the prescribed statutory period is converted
This rule embodies a requirement of twin to private property by the mere lapse of such period.
certifications, consisting of: (a) a copy of the original The requirement that the land should have been
classification approved by the DENR Secretary or classified as alienable and disposable agricultural
the President and certified as a true copy by the land at the time of the application for registration is
legal custodian of the official records; and (b) a necessary only to dispute the presumption that the
certificate of land classification status issued by the land is inalienable. (Malabanan v. Republic, G.R.
CENRO or PENRO and approved by the DENR No. 179987, Sept. 3, 2013.)
Secretary.
The period of possession prior to the declaration
However, despite the stringent rule held in Republic that land is alienable and disposable agricultural
v. T.A.N Properties, Inc. that the absence of the twin land is included in the computation of possession for
certifications justifies the denial of an application for purposes of acquiring registration rights over a
registration, subsequent rulings of the Supreme property if the land has already been declared as
Court in Republic v. Vega and Republic v. Serrano such at the time of the application for registration.
allowed the approval of the application based on What is important in computing the period of
substantial compliance. Even so Vega and Serrano possession is that the land has already been
were mere pro hac vice rulings and did not in any declared alienable and disposable at the time of the
way abandon nor modify the rule on strict application for registration. Upon satisfaction of this
compliance pronounced in T.A.N Properties requirement, the computation of the period may
(Republic v. Herederos De Ciriaco Chunaco include the period of adverse possession prior to the
Disteleria Incorporadia, G.R. No. 200863, Oct. 14, declaration that land is alienable and disposable.
2020) (AFP Retirement and Separation Benefits System v.
Republic of the Philippines, G.R. No. 180086, Jul. 2,
To establish that the land sought to be registered is 2014.)
alienable and disposable, applicants must present a
copy of the original classification approved by the Although Corporation A was able to submit a
DENR Secretary and certified as a true copy by the CENRO/PENRO certification certifying the
legal custodian of the official records. Absent the classification of the land as alienable and
DENR Secretary's issuance declaring the land disposable, a certification of land classification
alienable and disposable, the land remains part of approved by the DENR Secretary, and a Land
the public domain. Even if X adversely possessed Classification Map, it should be noted that those
the land, he cannot register the land since he failed documents pertain to a different lot. It was not
to prove the land is alienable. (Republic v. Malijan- shown that the lot acquired by Corporation A were
Javier, G.R. No. 214367, Apr. 4, 2018.) included in the certifications presented. Certainly, in
the absence of sufficient and convincing proof that
Notation in a geodetic survey that the survey was such realty is alienable and disposable land of public
inside alienable and disposable land does not domain, the possessor thereof could not acquire
constitute a positive government act validly ownership of the same, much less, have the right to
changing the classification of the land. A surveyor seek registration of title thereto under Section 14(1)
has no authority to reclassify lands of public domain. of the Property Registration Decree. (Ususan
Land of the public domain, to be the subject of Development Corporation v. Republic, G.R. No.
appropriation, must be declared alienable and 209462, July 15, 2020)
disposable either by the President or the DENR
Secretary. The applicant for land registration has the Mere notations appearing in survey plans are
burden of overcoming the presumption of State inadequate proof of the covered properties'
ownership by establishing through incontrovertible alienable and disposable character. These
evidence that the land sought to be registered is notations, at the very least, only establish that the
alienable or disposable based on a positive act of land subject of the application for registration falls
the government. (Republic vs. De Guzman Vda. de within the approved alienable and disposable
Joson, G.R. No. 163767, Mar. 10, 2014.)
area per verification through survey by the proper
government office. The applicant must also
The property subject of the application for
registration need not be classified as alienable and present a copy of the original classification of the
disposable agricultural land of the public domain for land into alienable and disposable land, as
the entire duration of the requisite period of declared by the DENR Secretary or as
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proclaimed by the President. Unfortunately, in

this case, the OSG has not been required to make How to prove: (STOP)
the necessary verification and has not submitted
the two documents that it submitted in Victoria. 1. Spanish title (inadmissible and ineffective proof
The invocation by X of Victoria in this case is, of ownership in land registration proceedings
thus, misplaced. (D.M. Consunji, Inc. v. Republic, filed after Aug. 16, 1976)
G.R. No. 233339 (Resolution), February 13, 2. Tax declarations and tax payments (not
2019) conclusive evidence of ownership; must be
coupled with proof of actual possession for the
Sufficient Proof (R.A. No. 11573, Sec. 7) period required by law) 4
A duly signed certification by a duly designated 3. Other kinds of proof
DENR geodetic engineer that the land is part of - Testimonial evidence
alienable and disposable agricultural lands of the
- Photos of improvements introduced
public domain is sufficient proof that the land is
alienable. Said certification shall be imprinted in the 4. Presidential issuances and legislative acts
approved survey plan submitted by the applicant in (constitutive of a fee simple title or absolute title
the land registration court. in favor of the grantee, a law ceding full
ownership to a government institution)
Contents of Certification (R.A. No. 11573, Sec.
7) Note: The holder of a Spanish title may still lose his
1) A sworn statement by the geodetic engineer ownership of the real property to the occupant who
that the land is within the alienable and actually possesses the same for the required
disposable lands of the public domain. prescriptive period. Taking the law as a whole, it
2) Applicable Forestry Administrative Order, has clearly set a deadline for the filing of
DENR Administrative Order, Executive Order, applications for registration of ALL Spanish titles
under the Torrens system (i.e., 6 months from its
Proclamations and the Land Classification
effectivity or on 16 August 1976), after which, the
Project Map Number covering the subject land. Spanish titles may no longer be presented to prove
ownership. Spanish titles can no longer be
Should there be no available copy of the countenanced as indubitable evidence of land
Forestry Administrative Order, DENR ownership.(Santiago v. SBMA, G.R. No. 156888,
Administrative Order, Executive Order, Nov. 20, 2006.)
Proclamation, it is sufficient that the Lad
Classification (LC) Map Number, Project (3B) Open, exclusive, continuous, and peaceful
Number, and date of release indicated in the possession in the concept of owner
land classification map be stated in the sworn
How to prove:
statement declaring that said classification map
1. Tax declarations
is existing in the inventory of LC Map records
2. Regular realty tax payments
of the National Mapping and Resource
3. Muniments of title (e.g., deeds of sale, wills,
Information Authority (NAMRIA) and is being
donation; to tack possession to that of
used by the DENR.
predecessors-in-interest)
4. Testimonial evidence
(2) Identity of land
5. Evidence of improvements introduced on the
How to prove: property
1) Survey plan approved by the Land
Management Bureau (LMB) X failed to squarely address the CA's finding that the
records do not show proof of how X’s predecessor
2. Technical description of the land
in interest came to own the Subject Land and how
3. Tax declarations this was inherited. These are crucial facts that X
needed to establish to show that its predecessor-in-
(3A) Private ownership interest had a prior valid claim of ownership over the
4
Tax declarations or realty tax payments of property are not purposes strengthens one’s bona fide claim of acquisition of
conclusive evidence of ownership. At most, they serve as a ownership (Republic v. Sta. Ana-Burgos, G.R. No. 163254,
good indicia of possession in the concept of an owner. The Jun. 1, 2007.)
voluntary declaration of a piece of property for taxation
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Subject Land. Precisely, San Pedro's claim of If there are several parcels of land situated in
ownership rests on these crucial facts, and without different provinces/cities belonging to one owner, he
them such claim becomes tenuous. With these facts must file in the RTC of each province/city where the
missing, the Court wholly agrees with the CA that different parcels of land are located for registration
"evidence on record is insufficient to prove that X’s purposes.
predecessor-in-interest possessed or occupied the
subject land in the concept of an owner since June
If land is situated between boundaries of 2
12, 1945, or earlier." Also, the evidence that Y
provinces, application must be filed:
adduced to disprove X's claim of ownership,
- When boundaries are not defined: with the RTC
including tax declarations dated 1941, cast serious
doubt on DMCI's evidence to show its and its of the place where it is declared for taxation
predecessors-in-interest open, continuous, purposes;
exclusive and notorious possession and occupation - When boundaries are defined: a separate plan
since June 12, 1945 or earlier. (D.M. Consunji, Inc. for each portion must be made by a surveyor and
v. Republic, G.R. No. 233339 (Resolution), a separate application for each lot must be filed
February 13, 2019) with the appropriate RTC
Where to file application In cases of delegated jurisdiction to the MTC, appeal

This is applicable for both PD 1529 and CA 141. is directed to the CA.
General rule: RTC of the province or city where the When to file application
land is situated.
The period given under Sec. 47 of CA 141
Note: File together with the application all original (extending application up to December 31, 2020)
muniments of titles or copies thereof and a survey was repealed by RA 11573. Thus, eliminating the
plan of the land as approved by the Bureau of time limit on when to file.
Lands.
Form of the application (WSS)
Under LRA Circular 05-2000, the original tracing 1) Written
cloth plan is no longer forwarded to the LRA; only a 2. Signed by the applicant or person duly
certified copy thereof needs to be forwarded. authorized in his behalf
- If there is more than one applicant, the
P.D. 1529 has eliminated the distinction between application shall be signed and sworn to by
the general jurisdiction vested in the RTC and the and in behalf of each.
limited jurisdiction conferred upon it by the former 3. Sworn to before an officer authorized to
law when acting merely as land registration court. administer oath for the province or city where
Aimed at avoiding multiplicity of suits, the change the application was actually signed. (P.D. 1529,
has simplified registration proceedings by conferring § 15 & C.A. 141, § 50.)
upon the RTCs the authority to act not only on
original applications but also those filed after original Contents of Application (MADFARCE)
registration, with the power to hear and determine 1) Manner of acquisition of land
all questions arising upon such applications or 2. Assessed value of the land and the buildings
petitions. (Averia v. Caguioa, G.R. No. L-65129, and other improvements based on the last
Dec. 29, 1986) assessment for taxation purposes
3. Description of the land applied for together with
Exception: Delegated jurisdiction of the MTC to the buildings and improvements; the plan
hear and determine cadastral or land registration approved by Director of Lands and the technical
cases covering: descriptions must be attached
- Lots where there is no controversy or opposition, 4. The court may require Facts to be stated in the
or application in addition to those prescribed by
- Contested lots, the value of which does not the Decree not inconsistent therewith and may
exceed P300,000, outside Metro Manila; require the filing of additional papers
P400,000 in Metro Manila. 5. Full names and addresses of All occupants of
the land and those of the Adjoining owners, if
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known; and if not known, the applicant shall application, as published, a new publication of
state the extent of the search made to find them the amended application must be made. The
6. If the application describes the land as bounded purpose of the new publication is to give notice
by a public or private way or Road, it shall state to all persons concerned regarding the
whether or not the applicant claims any portion amended application.
of the land within the limits of the way or road, 2. Without a new publication, the registration court
and whether the applicant desires to have the cannot acquire jurisdiction over the area or
line of way or road determined (P.D. 1529, § parcel of land that is added to the area covered
20.) by the original application, and the decision of
7. Citizenship and Civil status of the applicant the registration court would be a nullity insofar
- if married, name of spouse, and as the decision concerns the newly included
- if the marriage has been legally dissolved, land.
when and how the marriage relation was 3. But if the amendment consists in the exclusion
terminated of a portion of the area covered by the original
8. Mortgage or Encumbrance affecting the land or application and the original plan as previously
names of other persons who may have an published, a new publication is not necessary.
interest therein, legal or equitable (P.D. 1529, § In the latter case, the jurisdiction of the court is
15 & C.A. 141, § 50.) not affected by the failure of a new publication
(Benin v. Tuason, G.R. No. L-26127, 1974).
Note: If the applicant is a non-resident of the
Philippines, he shall file an instrument appointing an Amendments in a petition that do not involve an
agent residing in the Philippines and shall agree that addition but only a reduction of the original area
service of any legal process in the proceeding made that was published no longer require a
upon his agent shall be of the same legal effect as if republication because the amended area was
made upon the applicant within the Philippines. already included in the first publication
(P.D. 1529, § 16.) (Republic v. San Mateo, et al., G.R. No. 20356,
Nov. 10, 2014).
Limitation of Area
For CA 141, application is only for a maximum of 12 Hearing, Judgment, and Post-Judgment Incidents in
hectares. (R.A. 6940, § 3.) Ordinary Land Registration
Amendments Speedy hearing

AMENDMENTS IN ORDINARY The trial court is required to dispose of the case
REGISTRATION PROCEEDINGS within 90 days from the date of submission thereof
Striking out one or more The court may strike for decision. (P.D. 1529, § 27)
of the parcels of land out at any time
applied for or by a Note: The court, if it deems necessary, may refer
severance of the the case or any part thereof to a referee who shall
application hear the parties and their evidence, and the referee
Substantial change in New technical shall submit his report thereon to the court within 15
boundaries, increase in description and new days after the termination of such hearing. The court
area, inclusion of publication and may render judgment in accordance with the report
additional land notice are necessary as though the facts have been found by the judge
Joinder, substitution, or File motion with court himself. (P.D. 1529, § 27)
discontinuance of any of
the parties A judgment is a decision of the court constituting its
Decrease in area File motion with opinion after taking into consideration the evidence
court; no need for submitted.
new publication or
notice Judgment rendered in a land registration
proceeding becomes final upon the lapse of 15 days
Summary of Rules counted from the receipt of notice of the judgment.
1) If the amendment consists in the inclusion in (P.D. 1529, § 30 as modified by B.P. 129, § 39.)
the application for registration an area or parcel
of land not previously included in the original
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The judgment of the court in the land registration

case becomes final insofar as the State is
concerned 15 days from receipt by the OSG (not
merely by the local designated prosecutor) of the
copy of the decision, without there being an appeal
or motion for reconsideration by any of the parties.
(Republic v. Sayo, G.R. No. L-60413, Oct. 31,
1990.)
However, notwithstanding the lapse of the 15-day

period from receipt of judgment by the parties, the
court continues to retain control over the case until
the expiration of 1 year after the entry of decree of
registration by the LRA. (Republic v. Assosacion
Benevola de Cebu, G.R. No.77243, Oct. 26, 1989.)
In special proceedings, the purpose of execution of

judgment is to establish a status, condition or fact;
in land registration proceedings, the ownership by a
person of a parcel of land is sought to be
established. After the ownership has been proved
and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary,
except when the adverse or losing party had been
in possession of the land and the winning party
desires to oust him therefrom. (Ronald Ting v. Liro,
G.R. No. 168913, Mar. 14, 2007.)
Partial judgment
In a case where only a portion of the land subject of
registration is contested, the court may render
partial judgment provided that a subdivision plan
showing the contested and uncontested portions
approved by the Director of Lands is previously
submitted to said court. (P.D. 1529, § 28.)
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Post-Judgment Incidents
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Writ of Possession: employed to enforce a file an action for the determination of the issue
judgment to recover the possession of land. It of ownership and possession (as a
commands the sheriff to enter the land and give consequence of such ownership). (Macutay v.
possession of it to the person entitled under the Samoy, G.R. No. 205559, December 2, 2020.)
judgment; no prescription against: (1) the loser and
(2) anyone unlawfully and adversely occupying the a. Who may apply
land at anytime up to and until the issuance of the
decree of registration.
P.D. 1529 C.A. 141
The fundamental rule is that a writ of possession can MATTER GOVERNED
be issued not only against the original oppositors in Confirmation of
Original registration
a land registration case and their representatives imperfect or
proceedings
and successors-in-interest, but also against any incomplete title
person unlawfully and adversely occupying said lot NATURE
at any time before and up to the issuance of the final 1. In rem proceedings
decree. (Heirs of Cristobal Marcos vs. De Banubar, 2. Judicial
25 SCRA 316 [1968]) 3. Decree of registration issued is conclusive
and final
When writ of possession may not issue: When a 4. Governed by court procedure and law of
person takes possession of a land after the evidence
issuance of the final decree, and none of them had WHO MAY APPLY
been a party in the registration proceedings, the writ (PD 1529, § 14, as (CA 141, § 48, as
of possession will not issue. Such person cannot be amended by RA amended by RA
summarily ousted through a writ of possession 115731)
secured by a mere motion, and that regardless of 115731)
1. Those who by 1. Those who by
any title or lack of title of said persons to hold
themselves or themselves or
possession of land in question, they cannot be
ousted without giving them their day in court in through their through their
proper independent proceedings. (Heirs of Cristobal predecessors-in- predecessors-in-
Marcos vs. De Banubar, 25 SCRA 316 [1968]) interest have been in interest have been in
open, continuous, Open, continuous,
Writ of Demolition: the complement of writ of exclusive, notorious exclusive, notorious
possession; to demolish improvements introduced possession and possession and
by the defeated oppositor or his successor-in- occupation of occupation of
interest alienable and alienable and
disposable lands of disposable
Means to Recover Possession
the public domain agricultural lands of
1) Forcible entry
under a bona fide public domain under
2. Unlawful detainer
claim of ownership a bona fide claim of
3. Accion publiciana
for at least 20 years ownership, for at
4. Accion reivindicatoria
immediately least 20 years
An accion publiciana is limited to the recovery of preceding the filing of immediately
the better right of possession independent of title the application for preceding the filing of
or ownership. Any determination of ownership confirmation of title the application for
made in connection is not final or binding. A except when confirmation of title
provisional determination of ownership, i.e. a prevented by war or except when
publiciana proceeding, does not pose a "real force majeure. They prevented by war or
attack" on the Torrens title in dispute since shall be conclusively force majeure. They
courts do not possess the jurisdiction to order presumed to have
the alteration, modification or cancellation of shall be conclusively
performed all the presumed to have
Torrens titles in such cases as provided under
conditions essential performed all the
PD 1529.
to a Government conditions essential
Nevertheless, as held in Heirs of Cullado, the grant and shall be to a Government
adjudication is not a final and binding entitled to a grant and shall be
determination of the issue of ownership. This is Government grant
not a bar for the parties or even third persons to
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and shall be entitled entitled to a in area for a period of 25 years and renewable
to a certificate of title. certificate of title. for not more than 25 years (PHIL. CONST., art.
XII, § 3.)
2. Those who acquired 2. Those who have - When the land has been previously acquired
ownership of private acquired ownership of by prescription by a natural person and
lands or abandoned private lands or subsequently transferred to a juridical entity. In
riverbeds by right of abandoned riverbeds this case, a corporation may apply for judicial
accession or by right of accession confirmation of title. (Dir. of Lands v. IAC and
accretion under the or accretion under the ACME, G.R. No. 73002, Dec. 29, 1986.)
existing laws provision of existing
laws . Summary of rule: A juridical entity cannot
3. Those who have acquire ownership of disposable and alienable
acquired ownership 3. Those who have land nor apply for the registration thereof. The
of land in any manner acquired ownership disposable and alienable land must first become
provided for by Law of land in any other private land by operation of law through the
possession and occupation of a Filipino citizen in
manner provided by
Note: Where the land the manner and period required by law. The
law. juridical entity may then acquire ownership of
is owned in common,
all the co-owners shall such private land from the Filipino citizen and
file the application becomes eligible to apply for the registration
jointly. thereof in its name.
Note: A judicial
Where the land has declaration that a
been sold under pacto parcel of land is public
de retro, the vendor a does not preclude
retro may file an even the same
application for the applicant from
original registration of subsequently seeking
the land: Provided, a judicial confirmation
however, that should of his title to the same
the period for land, provided he
redemption expire thereafter complies
during the pendency of with the provisions of
the registration Sec. 48 of C.A. 141, as
proceeding and amended and as long
ownership to the as said public land
property consolidated remains alienable and
in the vendee a disposable. (Dir. of
retro,the latter shall be Lands v. CA, G.R. No.
substituted for the L-47847, Jul. 31,
applicant and may 1981.)
continue the
proceedings. b. Decree of registration
A trustee on behalf of Decree of Registration (P.D. 1529, § 31.)

his principal may apply - The decree issued by the LRA pursuant to the
for original registration order of the court
of any land held in trust - Binds the land and quiets title thereto, subject only
by him, unless to such exceptions or liens as may be provided by
prohibited by the law
instrument creating the - Conclusive upon and against all persons including
trust.
the national government and all branches thereof,
General rule: All these persons must be natural-
whether or not mentioned by name in the
born Filipino citizens.
Exceptions: application or notice
- Juridical persons may lease agricultural and
disposable land not exceeding 1,000 hectares
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Contents of the Decree (DMD-DO) (P.D. 1529, § Party to File (P.D. 1529, § 32.)
31.) - Any aggrieved party, including persons deprived
1) Date, hour and minute of its entry of opportunity to be heard, including the
2. Whether the owner is Married or unmarried, government
and if married, the name of the spouse; - Aggrieved party does not need to be an oppositor
provided that if the land is conjugal property, or original claimant in the proceedings
the decree shall be issued in the name of both
spouses Parties who Cannot File
3. If the owner is under Disability, the nature of - An oppositor who abandoned his claim
such disability, and if a minor, his age - An oppositor who had notice of the proceedings
4. Description of the land and shall set forth the but failed to raise his claims (Crisolo v. CA, G.R.
estate of the owner, and also show their relative No. L-33093, Dec. 29, 1975.)
easements, liens, attachments, and other
encumbrances Requisites for Review (ReDeFFiN)
5. Other matters to be determined in pursuance of 1) Petitioner has a Real and dominical right;
the law 2. He was Deprived thereof;
3. Through Fraud;
Process of Issuing the OCT (P.D. 1529, § 39-42.) 4. Petition is Filed within 1 year from issuance of
1) Within 15 days from finality of order of judgment the decree; and
directing registration of title – court orders the 5. The property has Not yet passed to an innocent
LRA to issue decree of registration and purchaser for value
certificate of title
2. Clerk of court will send order of court and Fraud
copies of judgment Extrinsic fraud refers to a fraud committed to the
3. Writ of Demolition may be issued. The court unsuccessful party by his opponent, preventing him
from fully exhibiting his case by keeping him away
has authority to order, as a consequence of the
from court, a false promise of a compromise; or
writ of possession issued by it, the demolition of where the defendant never had knowledge of the
improvements introduced by the defeated suit, being kept in ignorance by the acts of the
oppositor or his successor-in-interest plaintiff; or when an attorney fraudulently or without
4. Administrator will issue a decree of registration authority connives at his defeat. (Baclaran
and original and duplicate of OCT that is signed Marketing Corp. v. Nieva, G.R. No. 189881, Apr. 19,
by him, enter, and file decree of registration in 2017.)
LRA
5. Send to ROD the original and duplicate of title Different kinds of fraud exist, but the law allowing
and certificate for entry in his registration book fraud as a ground for a review or reopening of a land
registration decree contemplates actual and
6. Enter in record book, dated, signed, numbered
extrinsic fraud. Actual fraud “proceeds from an
and sealed to take effect upon date of entry intentional deception practiced by means of the
7. ROD to send notice to registered owner that his misrepresentation or concealment of a material
owner’s duplicate is ready for delivery after fact.” (Mendoza v. Valte, G.R. No. 172961, Sep. 7,
payment of fees 2015.)
8. ROD shall send duplicate and note on each
certificate of title to whom it is issued Intrinsic fraud refers to the acts of a party at a trial
9. Original copy to be filed in ROD that prevented a fair and just determination of the
10. Bound in consecutive order case, but the difference is that the acts or things, like
falsification and false testimony, could have been
litigated and determined at the trial or adjudication
c. Review of decree of of the case. (Pinausukan Seafood House v. Far East
registration; innocent Bank & Trust Co., G.R. No. 159926, Jan. 20, 2014.)
purchaser for value
Examples of Extrinsic Fraud
Review of Decree of Registration 1. When the applicants for registration suppressed
Remedy available in cases of actual fraud the fact that the petitioners (for review of
committed in the adjudication or confirmation of title. decree) were the legal and rightful owners of
(P.D. 1529, § 32.) the land in question, and that the applicants
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merely possessed the land as antichretic - Fatal infirmity of the decision for want of due
creditors process
2. When the applicant omits other persons’ - Lack of jurisdiction of the court
interests and claims on the land
3. Deliberate misrepresentation that the land D. CERTIFICATE OF TITLE
involved was uncontested
4. Obtaining adjudication in the name of a co- Torrens Title
owner, which the applicant knew had not been A Torrens Title is a certificate of ownership issued
allotted to him in the partition under the Torrens System, through the ROD,
5. Intentionally concealing facts naming and declaring the owner of the real property
described therein, free from all liens and
6. Conniving with the land inspector
encumbrances, except such as may be expressly
7. Deliberately failing to notify parties entitled to
noted therein or otherwise reserved by law. (P.D.
notice 1529, § 44)
8. Misrepresenting the identity of the land involved
9. Inducing a party not to oppose application Note: A title once registered cannot be impugned,
Deliberate failure to disclose possession by altered, changed, modified, enlarged, or diminished
other persons (Ramirez v. CA, G.R. L-38185, except in a direct proceeding permitted by law,
Sep. 24, 1986.) usually for the protection of innocent third persons.
Note: In all cases, the allegation of fraud must be Attributes of a Torrens Certificate of Title (FINIP)
substantiated with specific, intentional acts to 1) Free from liens and encumbrances
deceive and deprive another of his right (Crisolo v. 2. Incontrovertible and indefeasible
CA, G.R. No. L-33093, Dec. 29, 1975.) 3. Not subject to collateral attack
4. Imprescriptible
Innocent Purchaser for Value 5. Presumed valid and devoid of flaws
For a petition for review of the decree to prosper, the
land must not have passed to an innocent purchaser (1) Free from liens and encumbrances
for value.
General Rule: Claims and liens of whatever
Innocent purchaser for value is one who buys the character existing against the land prior to the
property of another, without notice that some other issuance of the certificate of title are cut off by such
person has a right or interest in such property and certificate and the certificate so issued binds the
pays the full price for the same, at the time of such whole world, including the government.
purchase or before he has notice of the claims or
interest of some other person in the property. One Exceptions: (CNT-PD)
claiming to be an innocent purchaser for value has 1) Those noted on the Certificate
the burden of proving such status. (Leong v. See, 2. Liens, claims, or rights arising or existing under
G.R. No. 194077, Dec. 3, 2014.) the laws and the Constitution, which are Not by
law required to appear on record in the Register
Note: Where innocent third persons who rely on the of Deeds in order to be valid
correctness of the certificate of title thus issued
3. Unpaid real estate Taxes levied and assessed
acquired rights over the property, the court cannot
disregard such rights and order the total cancellation within 2 years immediately preceding the
of the certificate. (Tenio-Obsequio v. Court of acquisition of any right over the land by an
Appeals, G.R. No. 107967, Mar. 1, 1994.) innocent purchaser for value
4. Any Public highway, or private way established
Note: “the defense of having purchased the or recognized by law, or any government
property in good faith may be availed of only where irrigation, canal or lateral thereof, if the
registered land is involved and the buyer had relied certificate of title does not state the boundaries
in good faith on the clear title of the registered of such highway or irrigation canal or lateral
owner." It does not apply when the land is not yet thereof has been determined
registered with the Registry of Deeds. (Heirs of 5. Any Disposition of the property or limitation on
Gregorio Lopez v. Development Bank of the Phils.,
the issue thereof pursuant to P.D. 27 or any
G.R. No. 193551, Nov. 19, 2014.)
other laws or regulations on agrarian reform
Other Grounds for Review
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(2) Incontrovertible and indefeasible the judgment or proceeding pursuant to which the
title was decreed.
General Rule: Upon the expiration of 1 year from
and after the entry of the decree of registration in the There is a direct attack when the object of an action
LRA, the decree and the corresponding certificate of is to annul or set aside such judgment or enjoin its
title become incontrovertible and indefeasible. enforcement.
Exceptions: (PNF) There is an indirect or collateral attack when, in

1) If Previous valid title of the same land exists an action to obtain a different relief, an attack on the
2. When land covered is Not capable of judgment or proceeding is nevertheless made as an
registration incident thereof. (Sampaco v. Lantud, G.R. No.
3. When acquisition of certificate is attended by 163551, July 18, 2011)
Fraud
In deference to the conclusiveness and
indefeasi ilit of orren title a certi cate of title
The certificate is the best evidence of ownership and
can only be subject to a direct attack. The attack is
shows exactly the real interest of its owner, subject
considered direct when the object of an action is to
to certain exceptions.
annul or set aside such proceeding or enjoin its
enforcement. Conversely, an attack is indirect or
The rule on the incontrovertible nature of a
collateral when, in an action to obtain a diﬀerent
certificate of title applies when what is involved is the
relief, an attack on the proceeding is nevertheless
validity of the OCT, not when it concerns that of the
made as an incident thereof. An action to attack a
TCT. (Arguelles v. Timbancaya, G.R. No. L-29052,
certi cate of title a e an ori inal action or a
July 30, 1976)
counterclaim, in which a certificate of title is assailed
as void. (Agbayani v. Lupa Realty Holding Corp.,
Since the period of one year had already lapsed G.R. No. 201193, June 10, 2019)
when Y questioned the OCT's validity on the ground
of fraud via his Answer, X’s OCT had already
What cannot be collaterally attacked is the
become indefeasible and, until cancelled in an
certificate of title and not the title itself. Title as a
appropriate direct proceeding, remains to be valid.
concept of ownership should not be confused with
Thus, X has a better right of possession because his
the certificate of title as evidence of such ownership
right is based on ownership recognized by OCT P-
although both are interchangeably used. (Lacbayan
61499 registered and titled under his name. The
v. Samoy, G.R. No. 165427, March 21, 2011)
age-old rule that the person who has a Torrens title
over the land is entitled to possession thereof
The question on the validity of a Torrens title,
squarely applies in his favor. (Heirs of Cullado v.
whether fraudulently issued or not, can only be
Gutierrez, G.R. No. 212938, July 30, 2019)
raised in an action expressly instituted for that
purpose. The action for the declaration of nullity of
The sole remedy of the land owner whose property
deed of sale commenced by the petitioners in the
has been wrongfully or erroneously registered in
RTC is not the direct proceeding required by law to
another's name is, after one year from the date of
attack a Torrens certificate of title. (Tapuroc v.
the decree, not to set aside the decree but,
Loquellano de Mende, G.R. No. 152007, 2007)
respecting the decree as incontrovertible and no
longer open to review, to bring an ordinary action in
the ordinary court of justice for reconveyance or, if Exceptions:
the property has passed into the hands of an It should not be overlooked that private respondent
innocent purchaser for value, for damages. (Heirs of filed a counterclaim against petitioner, claiming
Tomakin v. Heirs of Navares, G.R. No. 223624, July ownership over the land and seeking damages.
17, 2019) Hence, we could rule on the question of the validity
of the certificate of title for the counterclaim can be
considered a direct attack on the same. A
(3) Not subject to collateral attack
counterclaim can be considered a complaint, only
this time, it is the original defendant who becomes
A certificate of title shall not be subject to collateral
the plaintiff. It stands on the same footing and is to
attack. It cannot be altered, modified, or cancelled
be tested by the same rules as if it were an
except in a direct proceeding in accordance with the
independent action.
law. (P.D. 1529, § 48)
An action is an attack on a title when the object of In an analogous case, the Court ruled on the validity
the action is to nullify the title, and thus challenge of a certificate of title despite the fact that the original
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action instituted before the lower court was a case land in derogation of the title of the registered owner
for recovery of possession. The Court reasoned that shall be acquired by prescription or adverse
since all the facts of the case are before it, to direct possession." There can be no acquisitive
the party to institute cancellation proceedings would prescription with respect to a titled parcel of land. In
be needlessly circuitous and would unnecessarily Umbay v. Alecha, the Court explained that the right
delay the termination of the controversy. to recover possession of registered land is
(Development Bank of the Philippines v. CA, G.R. imprescriptible on the part of the registered owner
129471, April 28, 2000) because possession is a mere consequence of
ownership. (Heir of Cardenas v. The Christian and
Although, ordinarily, a title becomes incontrovertible Missionary Alliance Churches of the Philippines,
one year after it is issued pursuant to a public grant, Inc., G.R. No. 222614, March 20, 2019)
the rule does not apply when such issuance is null
and void. An action to declare the nullity of that void (5) Presumed valid and devoid of flaws
title does not prescribe; in fact, it is susceptible to
direct, as well as to collateral attack. (Ferrer v. Hon. This is also called the “Mirror Doctrine.”
Antonio Bautista, G.R. No. L-46963, March 14,
1994) General Rule: A Torrens certificate of title is
presumed to have been regularly issued, valid, and
A null and void judgement is susceptible to direct as without defects. The buyer has the right to rely upon
well as collateral attack. Directly a void judgement the face of the Torrens title and to dispense with the
may be question thru an action for annulment or it trouble of inquiring further.
may be attacked collaterally by assailing its validity
in another action where it is invoked. This is Exception: When he has actual knowledge of facts
because a judgment rendered by a court without and circumstances that would impel a reasonably
jurisdiction has no binding force and effect. cautious man to make inquiry or when the purchaser
(Estoesta v. CA, G.R. 74817, November 8, 1989) has knowledge of a defect or lack of title in his
vendor or of suffient facts to induce a reasonably
(4) Imprescriptible prudent man to inquire into the status of the title of
the property in litigation (Amoguis v. Ballado, G.R.
Even adverse, notorious and continuous No. 189626, Aug. 20, 2018)
possession under claim of ownership for the period
fixed by law is ineffective against a Torrens title. (JM Registered land or the owners thereof are not
Tuason and Co. Inc. v. CA, G.R. No. L-23480, relieved from the following
September 11, 1979) - From any rights incident to the relation of husband
and wife, landlord and tenant
The fact that the title to the land was lost does not - From liability to attachment or levy on execution
mean that the land ceased to be registered land - From liability to any lien of any description
before the reconstitution of its title. It cannot established by law on the land and buildings
perforce be acquired by prescription. (Ruiz v. CA, thereon, or in the interest of the owner in such
G.R. No. L-29213, 1977)
land or buildings
Laches may be invoked to bar reconveyance of land - From any right or liability that may arise due to
to the registered owner only if there are intervening change of the law on descent
rights of third persons which may be affected or - From the rights of partition between co-owners
prejudiced if such land is returned to the registered - From the right of the government to take the land
owner. (De Lucas v. Gamponia, G.R. No. L-9335, by eminent domain
1956) - From liability to be recovered by an assignee in
insolvency or trustee in bankruptcy under the laws
With respect to a claim of acquisitive prescription, it relative to preferences
is baseless when the land involved is a registered - From any other rights or liabilities created by law
land since no title to registered land in derogation of
and applicable to unregistered land
that of the registered owner shall be acquired by
adverse possession. (Feliciano v. Zaldivar, G.R. No.
162593, 2006) Where certificate of title is obtained by a
trustee
- Trustee who obtains a Torrens title in his name,
Corp A has not acquired the right to possess the
subject property. According to Section 47 of over property held in trust by him for another,
Presidential Decree No. 1529, "no title to registered cannot repudiate the trust relying on the
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registrations, such being one of the limitations the development of national

upon the finality of title. wealth.
- Trustee could not perforce legally convey
ownership of the registered property in her will for A property registered under
she is not the absolute owner thereof. the Torrens System is not
subject to prescription.
Conclusive evidence as to Philippine courts
Torrens Title may be received in evidence in all Prescription is unavailing
Philippine courts and shall be conclusive as to all against the registered owner
matters contained therein, principally as to the and his hereditary successors.
identity of the landowner, except in so far as Accretion Requisites: (G-A-C)
provided in the Land Registration Act. - The deposit of soil or
sediment is Gradual and
Evidence of indefeasibility of title imperceptible;
A Torrens Certificate is evidence of indefeasible title - The land where accretion
of property in favor of the person whose name takes place is Adjacent to the
appears therein—such holder is entitled to the
banks of rivers or the
possession of the property until his title is nullified.
seacoast; and
(Pascual v. Coronel, G.R. No. 159292, 2007)
- It is the result of the natural
Types of Torrens Certificate of Title Current of the waters
1) Original Certificate of Title (OCT) - the first (river/sea) and not because of
title issued in the name of the registered owner human intervention. (Binalay
v. Manalo, G.R. No. 92161,
by the ROD covering a parcel of land which had
March 18, 1991)
been registered by virtue of a judicial or
administrative proceeding.
Note: Accretion to registered
2. Transfer Certificate of Title (TCT) - the title lands needs new registration.
issued by the ROD in favor of the transferee to
whom the ownership of the already registered The alluvial deposit to the bank
land had been transferred by virtue of a sale or of the river belongs to the
other modes of conveyance. riparian owner; the accretion
does not automatically
Modes of acquiring title become part of his registered
Mode Description/Requisites land and he must still apply for
Public Grant A conveyance of public land by the registration thereof.
the government to a private
individual There must be NO human
Acquisitive Requisites: (OCEN) intervention.
Prescription Open,
Continuous, The current causing the
Exclusive, and alluvial deposit must be from a
Notorious possession river. If it is from the sea, the
deposit will pertain to the State
If in good faith & with just title: (Government of the Phils. V.
10 yrs. uninterrupted Cabangis, 53 Phil. 112, March
possession is required 27, 1929).
Reclamation Filling of submerged land by
If in bad faith & without just deliberate act and reclaiming
title: 30 yrs. continuous title thereto.
possession is required
Conditions:
Note: If public land is involved, 1. Must be initially owned by
it must be (1) alienable and the government
disposable; and (2) declared 2. May be subsequently
or manifested as no longer transferred to private owners
needed for public service or
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court by way of motion or petition and filed by the

Note: The reclaimed land registered owner or a party in interest.
formed through human Necessity and effects of registering voluntary
intervention is public land and and involuntary instruments
belongs to the State. It has to Except for a will that purports to convey or affect a
be recovered first by Special registered land, the mere execution of the deeds of
Patent in the name of the sale, mortgage, or lease or other voluntary
documents serves only 2 purposes:
Republic of the Philippines or
1. As a contract between the parties thereto;
a government agency, and
and
only then may portions thereof 2. As evidence of authority to the ROD to
be transferred by sale or other register such documents. (Sec. 51, P.D.
conveyances to private 1529)
persons.
The recording of the sale with the proper Registry of
Voluntary 1. Private grant Deeds and the transfer of the certificate of title in the
Transfer 2. Voluntary execution of deed name of the buyer are necessary only bind third
of conveyance parties to the transfer of ownership. (Tamayo v.
- Contractual relationship Lacambra, G.R. 244232, Nov. 3, 2020)
between the parties
- Consensual Registration as the operative act of conveyance
Involuntary - No consent from the owner The registration of the instrument is the operative
Alienation of land act that conveys ownership or affects the land
- Forcible acquisition by the insofar as third persons are concerned.
State
Descent or Hereditary succession to the As between the seller and the buyer, the transfer of
Devise estate of deceased owner ownership takes effect upon the execution of a
Emancipa- The purpose of the same is to public instrument conveying the real estate.
Registration of the sale with the Registry of Deeds,
tion ameliorate the sad plight of
or the issuance of a new certificate of title, does not
Patent/Gran tenant-farmers
confer ownership on the buyer. Such registration or
t (Certificate issuance of a new certificate of title is not one of the
of Land Note: Title to land acquired modes of acquiring ownership. (Tamayo v.
Ownership pursuant to the land reform Lacambra, G.R. No. 244232, Nov. 3, 2020)
Award) program of the government is
not transferable for a period of Registration as notice
10 years except by (a) Registration creates a constructive notice to the
hereditary succession, (b) to whole world of such voluntary or involuntary
the government, (c) to the instrument or court writ or process. (P.D. 1529, §52)
LBP, or (d) to other qualified
beneficiaries. (R.A. 6657, § Registration is merely a specie of notice. It is a
27) ministerial act by which an instrument is sought to
be inscribed in the records of the Office of the
Note: Whoever first acquires title to a piece of Register of Deeds and annotated at the back of the
land shall prevail and where there are more than certificate of title covering the land subject of the
one certificates of title, the person holding the instrument. It is not a declaration by the State that
prior certificate is entitled to the land. The rule such an instrument is a valid and subsisting interest
refers to the date of the certificate of title not the in the land. The law on registration does not require
date of the filing for application. (Heirs of Lopez v. that only valid instruments shall be registered. The
De Castro, G.R. No. 112905, Feb. 3, 2000) purpose of registration is merely to give notice.
(Autocorp Group v. CA, G.R. No. 157553)
E. SUBSEQUENT REGISTRATION
Registration of instruments must be done in the
proper registry in order to effect and bind the land.
Subsequent Registration
Prior to the Property Registration Decree of 1978,
Involves incidental matters after original
the Land Registration Act governed the recording of
registration, brought before the land registration
transactions involving registered land, i.e., land with
Torrens title. On the other hand, Act No. 3344, as
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amended, provided for the system of recording of “Rule of Notice”

transactions over unregistered real estate without General Rule: There is an irrefutable presumption
prejudice to a third party with a better right. that the purchaser has examined every instrument
affecting the title. He is charged with notice of every
Accordingly, if a parcel of land covered by a Torrens fact shown by the record and is presumed to know
title is sold, but the sale is registered under Act No. every fact which an examination of the record would
3344 and not under the Land Registration Act, the have disclosed (Garcia v. CA, G.R. Nos. L-48971,
sale is not considered registered and the registration Jan. 22, 1980).
of the deed does not operate as constructive notice
to the whole world. (Mactan-Cebu International Exception: There is no effect of constructive notice
Airport Authority v. Spouses Edito, G.R. No. when there is fraud involved in the transaction. (Id.)
171535, June 5, 2009)
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Overview of Voluntary and Involuntary Dealings
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title covering the land

VOLUNTARY INVOLUNTARY conveyed, and
DEALINGS DEALINGS c) Pays the
Refer to deeds, Refer to writs or orders registration fees.
instruments, or or processes issued by
documents which are a court of record Current doctrine thus seems to be that entry alone (in
results of the free and affecting registered the primary entry book) produces the effect of
voluntary acts of the land which by law registration, whether the transaction entered is a
parties thereto should be registered to voluntary or an involuntary one, so long as the
be effective, and also to registrant has compiled with all that is required of him
such instruments which for purposes of entry and annotation, and nothing
are not the willful acts more remains to be done but a duty solely on the
of the registered owner register of deeds (Development Bank of the
and which may have Philippines v. The Acting Register Deeds of Neuva
been executed even Ecija, UDK No. 7671, June 23, 1988)
without his knowledge
or against his consent
1. VOLUNTARY DEALINGS
• Sale • Attachment
• Real property • Injunction Rule: Registration of the instrument is the operative
act that transmits or transfers title. Without
mortgage • Mandamus
registration, the instrument is binding only between
• Lease • Sale on execution the parties.
• Pacto de retro of judgment or
sale sales for taxes Exception: Actual knowledge of an unregistered
• Extra-judicial • Adverse claims dealing is equivalent to registration, insofar as the
settlement • Notice of lis third person with knowledge is concerned.
• Free or pendens
homestead When a party has knowledge of a prior existing
patent interest which is unregistered at that time he acquired
a right to the same land, his knowledge of that prior
• Powers of
unregistered interest has the effect of registration as
attorney to him. Knowledge of an unregistered sale is
• Trusts equivalent to registration. (Spouses Chua v.
The owner's duplicate The owner's duplicate Gutierrez, G.R. No. 172316, Dec. 8, 2010)
certificate of title must certificate of title need
be presented to record not be presented. Under the Torrens system, a sale of property that is
the deed in the registry not registered under the Torrens system is binding
and to make a Entry of the instrument only between the buyer and the seller and does not
memorandum on the in the ROD's daybook is affect innocent third persons. The only exception to
title. sufficient notice to all this is “knowledge of an unregistered sale is
persons, even if the equivalent to registration.” (Evy Construction v.
An innocent purchaser owner's duplicate Valiant Roll Forming Sales Corp., G.R. No. 207938,
for value becomes the certificate of title is not Oct. 11, 2017)
registered owner once presented.
he: Mirror Doctrine
A person dealing with registered land may rely on the
a) Presents and correctness of the certificate of title issued. The law
files with the ROD a does not oblige him to go beyond the certificate to
duly notarized deed of determine the condition of the property
conveyance and the (Locsin v. Hizon, G.R. No. 204369, Sept. 17, 2014)
same is entered in the
daybook, Where there is nothing in the certificate to indicate
b) Surrenders or any cloud or vice in the ownership of the property or
any encumbrance thereon, the purchaser is not
presents the owner’s
required to explore further than what the Torrens Title
duplicate certificate of indicates upon its face to find hidden defects or
claims that may subsequently defeat his right. (Id.)
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Every person dealing with registered land may safely 5) When there are sufficiently strong Indications to
rely on the correctness of the certificate of title issued impel closer inquiry into the location,
therefore. Even if a decree in a registration boundaries, and condition of the lot (Francisco
proceeding is infected with nullity, still, an innocent v. CA, G.R. No. L-30162, Aug. 31, 1987).
purchaser for value relying on a Torrens title issued
in pursuance thereof is protected (Cruz v. CA & Examples of “strong indications”:
Suzara, G.R. No. 120122, Nov. 6, 1997).
• When the land sold is in possession
of a person other than the seller
If land is registered and is covered by a certificate of
title, any person may rely on the correctness of the • When there are occupants other
certificate of title, and he or she is not obliged to go than the registered owner
beyond the four (4) corners of the certificate to
determine the condition of the property. This rule 6) When the certificate of title contains a notice of
does not apply, however, when the party has actual Lis pendens
knowledge of facts and circumstances that would
impel a reasonably cautious man to make such 7) When the purchaser had full Knowledge of
inquiry or when the purchaser has knowledge of a flaws and defects of the title (Bernales v. IAC,
defect or the lack of title in his vendor or of sufficient
G.R. Nos. 71490-91, June 28, 1988).
facts to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.
(Amoguis v. Ballado, G.R. No. 189626, Aug. 20, 8) When the purchaser buys from an Agent and
2018) not from the registered owner
Exceptions to Mirror Doctrine: (BOB-MILKA) Mirror Doctrine not applicable to unregistered

The person dealing with registered land must look lands
beyond the certificate of title in the following Notably, the mirror doctrine is not available when
instances: there is no certificate to begin with. While an ordinary
1) When the purchaser or mortgagee is a buyer may rely on the certificate of title issued in the
Bank/financing institution. They are impressed name of the seller, this defense of having purchased
with public interest and thus require high the property in good faith may be availed of only
standards of integrity and performance. Banks where registered land is involved and the buyer had
must exercise greater care, prudence, and due relied in good faith on the clear title of the registered
diligence in their property dealings. The owner. It does not apply when the land is not yet
registered with the Registry of Deeds.
standard operating practice for banks when
(Heirs of Gregorio Lopez v. DBP., G.R. No. 193551,
acting on a loan application is to conduct an
Nov. 19, 2014).
ocular inspection of the property offered for
mortgage and to verify the genuineness of the Chain of Title Rule
title to determine its real owner. (Andres v. General Rule: A forged deed is null and cannot
PNB, G.R. No. 173548, Oct. 15, 2014). convey title.
2) Where the Owner still holds a valid and existing Exception: Registration of title from a forger to an
certificate of title covering the same property. innocent purchaser for value (§55, Land Registration
The law protects the lawful holder of a Act). However, there must be a complete chain of
registered titles; all the transfers starting from the
registered title over the transfer of a vendor
original rightful owner to the innocent holder for
bereft of any transmissible right (Tomas v.
value, including the transfer to the forger, must be
Tomas, G.R. No. L-36897, June 25, 1980). duly registered, and the title must be properly issued
to the transferee
3) When the purchaser is in Bad faith (Egao v. CA, (Sps. Peralta v. Heirs of Abalon, G.R. No. 183448,
G.R. No. 79787, June 29, 1989). June 30, 2014).
4) Where the land is bought not from the Although generally a forged or fraudulent deed or
registered owner but from one whose rights document is a nullity and conveys no title, it may
have been Merely annotated on the certificate become the root of a valid title when the certificate of
of title (Quiñiano v. CA, G.R. No. L-23024, May title over the land has already been transferred from
31, 1971). the name of the owner to that of the forger and the
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land is sold later to an innocent purchaser for value. Effects of Registration of REM
A person who deals with registered property in good 1. Creates a lien that attaches to the property in
faith will acquire good title from a forger and will be favor of the mortgagee
absolutely protected by a Torrens title 2. Constructive notice of his interest in the property
(Sps. Villamil v. Villarosa, G.R. No. 177187, Apr. 7, to the whole world
2009).
Effects of Failure to REM
While, it is a familiar doctrine that a forged or 1. The mortgage is valid between the parties but is
fraudulent document may become the root of a valid
not binding against third persons
title, if title to the property has been transferred from
the forger to an innocent purchaser in good faith, the 2. If the personal property mortgaged is delivered,
same does not apply in the case of banking the contract becomes a pledge and not a chattel
institutions or those engaged in real estate for they mortgage
are expected to exercise more care and prudence 3. A third person’s actual knowledge of the
than private individuals in their dealing with mortgage has the same effect as registration
registered lands. In the absence of inquiry, the
respondent Bank cannot and should not be regarded Registration of Lease
as a mortgagee/purchaser in good faith It is the lessee, not the lessor, who is required to
(Erasusta v. CA, G.R. No. 149231, July 17, 2006). initiate the registration. The process is the same with
the registration of real estate mortgages. Similarly, no
Process of Registration (Generally): new certificate is issued.
1. Execution of instrument in a form sufficient in
law. It must contain the names, nationalities, Note: When there is a prohibition in mortgaged
residence, and postal addresses of the grantees property as regards subsequent conveyances, etc.,
or others acquiring an interest under the leasehold cannot be registered.
instrument. (P.D. 1529, §55)
2. Presentation of the following to the ROD: Subsequently registered mortgage and a prior
unregistered sale
• Owner’s duplicate certificate
Whether the land is unregistered or registered will
• Instrument determine which one will prevail between a
3. Payment of registration fees and documentary subsequently registered mortgage and a prior
stamp taxes unregistered sale
4. The ROD makes and signs a memorandum on
the certificate of title In unregistered land, an earlier instrument (sale or
5. The ROD issues a Transfer Certificate of Title (if mortgage) prevails over a latter one, and the
the instrument involves a transfer of the title to registration of any one of them is immaterial.
the land)
With registered land, the registered transaction
prevails over the earlier unregistered right. Prior
Registration of Real Estate Mortgage (REM) registration of a lien creates a preference as the act
1. Execution of deed in a form sufficient in law of registration is the operative act that conveys and
(public instrument) affects the land. The only exception to this rule is
2. Presentation to the ROD of the following: when a party has knowledge of a prior existing
(a) Deed of mortgage interest unregistered at the time he acquires a right,
(b) Owner’s duplicate certificate of title his knowledge of that prior unregistered interest has
3. Payment of fees the effect of registration as to him.
4. ROD’s entry of memorandum upon the original (Macadangdang v. Martinez, G.R. No. 158682, Jan.
certificate of title and the owner’s duplicate (date 31, 2005)
and time of filing, file number assigned, ROD’s
Registration of Trust
signature)
5. ROD’s annotation on the deed (date and time of
(1) Implied Trusts
filing, and reference to volume and page of the Presentation of a sworn statement claiming interest
registration book in which it was registered) arising from an implied trust, with a description of the
land, the name of the registered owner, and the
Note: No mortgagee’s or lessee’s duplicate number of the certificate of title
certificate shall be issued upon registration of the
REM (P.D. 1529, §60).
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(2) Express Trust Purposes of Adverse Claim

Presentation of the instrument creating the trust 1. Apprises third persons of the controversy over
the ownership of the land
Note: In both cases, a memorandum of the 2. Preserves and protects the right of the adverse
particulars of the trust shall be entered by the words claimant during the pendency of the controversy
“in trust” or “upon condition” and by reference by 3. Notice to third persons that any transaction
number to the instrument creating the trust (§65,
regarding the disputed land is subject to the
PD1529)
outcome of the dispute.
Registration of Appointed Trustee by Court (Arrazola v. Bernas, G.R. No. L-29740, Nov. 10,
1. Presentation of the certified copy of the decree 1978)
2. Surrender and cancellation of the duplicate
certificate Note: Actual knowledge is equivalent to the
3. Issuance and entry of a new certificate registration of the adverse claim.
Other Notes on Voluntary Dealings Requisites:

1. A claimant’s right or interest in the registered
- Builders in Good Faith may register
land is adverse to the registered owner;
- Aliens may register leases:
2. Such right arose subsequent to the date of
- They may be granted temporary rights for
original registration;
residential purposes
3. No other provision is made in the Decree for the
- Limit is 25 years, renewable for another 25
registration of such right or claim (P.D. 1529,
years
§70)
2. INVOLUNTARY DEALINGS
For this special remedy to be availed of, it must
Involuntary Dealings (Generally) be shown that there is no other provision in the
Transactions affecting land in which cooperation of law for registration of the claimant’s alleged right
registered owner is not needed, or those which are or interest in the property. The herein claim is
done even against his will. based on a perfected contract of sale.
Considering the Land Registration Act
specifically prescribed the procedure for
a. Adverse claim registration of a vendee’s right on a registered
property, the remedy provided in Section 110,
Adverse Claim would be ineffective. (Register of Deeds Quezon
Notice to third persons that someone is claiming an City v. Nicandro, G.R. No. L-16448, April 29,
interest on the property or has a better right than the 1961)
registered owner thereof. The disputed land is
subject to the outcome of the dispute It does not appear that respondent attempted to
(Sajonas v. CA, G.R No. 102377, July 5, 1996). register the agreement to sell and that the
registered owner refused to surrender the
Binding Effect of Adverse Claims duplicate certificate for the annotation of said
Annotations of adverse claims operate as a instrument. Instead, respondent merely filed an
constructive notice only to third parties—not to the adverse claim considering that Section 62 of the
court or the registered owner. These are merely Land Registration Act prescribed the procedure
claims of interest or claims of the legal nature and for the registration of respondent’s interest and
incidents of the relationship between the person there is no showing of her inability to produce the
whose name appears on the document and the owner’s duplicate certificate. Thus, the remedy
person who caused the annotation. It does not affect provided in Section 110 is ineffective for the
the validity of the claim or convert a defective claim purpose of protecting her right or interest in the
or document into a valid one. These claims may be disputed lot. (L.P Leviste & Company Inc. v.
proved or disproved during the trial. Thus, Noblejas, G.R. No. L-28529)
annotations are not conclusive upon courts or upon
owners who may not have reason to doubt the Formal Requisites to Register an Adverse Claim:
security of their claim as their properties' title holders. (WNR)
(University of Mindanao, Inc. v. Bangko Sentral ng 1. The adverse claimant must state the following in
Pilipinas, G.R. Nos. 194964-65, Jan. 11, 2016). Writing:
• His alleged right or interest
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• How and under whom such alleged right or As explained in Sajonas that for as long there is yet
interest is acquired no petition for its cancellation, the notice of adverse
• The description of the land in which the right claim remains subsisting. (Diaz-Duarte v. Spouses
or interest is claimed Ong, G.R. No. 130352, Nov. 3, 1998)
• The certificate of title number Cancellation of Adverse Claim
2. Such statement must be signed and sworn to An adverse claim may be canceled:
before a Notary public or authorized officer to 1. After the lapse of 30 days, upon the filing by the
administer the oath party-in-interest of a verified petition for such
3. The claimant shall state his Residence or place purpose
to which all notices may be served upon him 2. Before the lapse of said 30 days, upon the filing
by the claimant of a sworn petition withdrawing
Note: Noncompliance with formal requisites renders his adverse claim
the adverse claim non-registrable and ineffective. 3. Before the lapse of the 30-day period, when a
party-in-interest files a petition in the proper RTC
Examples of Registrable Adverse Claims
for the cancellation of the adverse claim and,
1. Voluntary instruments of sale and lease, when
after notice and hearing, the court finds that the
the owner refuses to surrender the duplicate
claim is invalid. If the court also finds the claim
certificate of title for annotation of the voluntary
to be frivolous, it may fine the claimant the
instrument (L.P. Leviste v. Noblejas, G.R. L-
amount of not less than 1,000 pesos nor more
28529, Apr. 30, 1979)
than 5,000 pesos, in its discretion.
2. An interest on land based on a lawyer’s
contingent fee contract arising after original
Grounds for Cancellation of Adverse Claim (P.D.
registration (Director of Lands v. Ababa, G.R.
1529, §64) (MoNoE-UVe)
No. L-26096, Feb. 27, 1979). Before final judgment, the court may order the
cancellation:
Examples of Non-registrable Adverse Claims 1. After showing that notice is only for purpose of
1. A mere money claim Molesting an adverse party
(Sanchez v. CA, G.R. No. L-40177, Feb. 12, 2. When it is shown that it is not necessary to
1976).
protect the right of the party who caused the
2. A claim based on hereditary rights of the children
registration thereof
of a deceased parent, when there are probate
3. Where the Evidence so far presented by the
proceedings and one parent is still living
plaintiff does not bear out the main allegations of
(Arrazola v. Bernas, G.R. No. L-29740, Nov. 10,
1978) the complaint
3. A second adverse claim based on the same 4. When the continuances of the trial are
ground by the same claimant Unnecessarily delaying the determination of the
4. Claims based on occurrences before the original case to the prejudice of the other party
registration. 5. ROD may also cancel by Verified petition of a
5. Possessor’s claim based on prescription or party who caused such registration
adverse possession, when the land is already
registered in the name of another Note: These grounds are the same as the grounds
for cancellation of Notice of Lis Pendens
(Arrazola v. Bernas, G.R. No. L-29740, Nov. 10,
1978)
Notes on Adverse Claims
The interested party must file with the proper court a
Period of Effectivity of Adverse Claim
petition for the cancellation of an adverse claim, and
The adverse claim shall be effective for a period of
a hearing must also first be conducted. The Register
30 days from the date of registration.
of Deeds cannot on its own automatically cancel the
adverse claim for due process purposes
The law, taken together, simply means that the
(Diaz-Duarte v. Ong, G.R. No. 130352, Nov. 3,
cancellation of the adverse claim is still necessary to
1998).
render it ineffective otherwise, the inscription will
remain annotated and shall continue as a lien upon
The effects of a foreclosure sale retroact to the date
the property. (Sajonas v. CA, G.R. No. 102377, July
of registration of the mortgage. If the adverse claim is
5, 1996)
registered only after the annotation of the mortgage
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at the back of the certificate of title, the adverse claim When Lis Pendens is Not Proper (P2LAR)
could not affect the rights of the mortgagee, even if 1. Preliminary attachment
the foreclosure of the mortgage and the public 2. Proceedings for the Probate of wills
auction sale occurred after the annotation of the 3. Levies on execution
adverse claim 4. Proceedings for Administration of the estate of
(Limpin v. IAC, G.R. No. 70987, Jan. 30, 1987). deceased persons and
5. Proceedings in which the only object is the
An adverse claim may exist concurrently with a
subsequent annotation of a notice of lis pendens Recovery of a money judgment
(Ty Sin Tei v. Dy Piao, G.R. No. 11271, May 28,
1958). Elements to annotate notice of lis pendens
1. Property must be of such character as to be
When an adverse claim exists concurrently with a subject to the rule;
notice of lis pendens, the notice of adverse claim may 2. The court must have jurisdiction both over the
be validly canceled after the registration of such person and the res; and
notice, since the notice of lis pendens also serves the 3. The property or res must be sufficiently
purpose of the adverse claim described in the pleadings.
(Villaflor v. Juezan, G.R. No. 35205, Apr. 17, 1990).
Effect of Notice of Lis Pendens (P.D. 1529, §76)
b. Notice of lis pendens No action to recover possession, or to quiet title, or
to remove clouds, or for partition, or other judicial
Notice of Lis Pendens proceedings directly affecting title or use or
“Lis pendens” means “pending suit.” It merely creates occupation or buildings thereon, and no judgment,
a contingency and not a lien. and no proceeding to vacate or reverse any
judgment, shall have any effect upon registered land
Purpose of Lis Pendens as against persons other than the parties, unless
A notice of lis pendens is an announcement to the memorandum or notice is filed or registered
whole world that a particular real property is in (stating institution of action or proceeding and court
litigation, serving as a warning that one who acquires were pending, date of institution, reference to the
an interest over said property does so at his own risk, number of certificate of title, an adequate description
or that he gambles on the result of the litigation over of the land affected and registered owner).
the said property (Spouses Po Lam v. CA, G.R. No.
116220, Dec. 6, 2000). Effect of Registration
1. Impossibility of alienating the property in dispute
The purpose of the notice of lis pendens is to during the pendency of the suit
constructively advise or warn all people who deal with 2. If alienated, the purchaser is subject to the final
the property that they so deal with it at their own risk, outcome of the pending suit
and whatever rights they may acquire in the property
3. ROD is duty-bound to carry over the notice of lis
in any voluntary transaction is subject to the results
of the action, and may well be inferior and pendens on all new titles to be issued
subordinate to those which may be finally determined
and laid down therein (Heirs of Marasigan v. IAC, Grounds for Cancellation of Lis Pendens (P.D.
G.R. No. L-69303, July 23, 1987). 1529, §64) (MoNoE-UVe)
Before final judgment, the court may order the
When Notice of Lis Pendens is Proper (QEER- cancellation:
COP) 1. After showing that notice is only for purpose of
1. To Quiet title thereto Molesting an adverse party
2. To Establish a right, equitable estate, or interest 2. When it is shown that it is not necessary to
in specific real property protect the right of the party who caused the
3. To Enforce a lien, charge, or encumbrance registration thereof
against it 3. Where the Evidence so far presented by the
4. To Recover possession of a real estate plaintiff does not bear out the main allegations of
5. To remove Clouds upon the title thereof the complaint
6. Any Other proceedings of any kind in court 4. When the continuances of the trial are
directly affecting the title to the land or the use of Unnecessarily delaying the determination of the
occupation thereof or the building thereon. case to the prejudice of the other party
7. For Partition
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5. ROD may also cancel by Verified petition of the 4. If it is not registered, Actual knowledge has the
party who caused such registration same effect as registration
Notes on Lis Pendens When Attachment may be Discharged

All findings of fraud should begin the exposition with 1. Upon giving of a counter-bond;
the presumption of good faith; The erroneous 2. When the attachment was improperly or
annotation of a notice of lis pendens does not negate irregularly issued or enforced; or
good faith. The overzealousness of a party in 3. When attaching party’s bond is insufficient
protecting pendent lite his perceived interest,
inchoate or otherwise, in the corporation’s properties Execution Sale
from depletion or dissipation, should not be lightly To enforce a lien of any description on registered
equated to bad faith (Lu v. Lu Ym, Sr., G.R. Nos. land, any execution or affidavit to enforce such lien
153690, 157381 & 170889, Feb. 15, 2011). shall be filed with ROD where the land lies.
Attachment Register in registration book & memorandum upon
The legal process of seizing another's property in the proper certificate of title as an adverse claim or
accordance with a writ or judicial order to secure as an encumbrance.
satisfaction of a judgment yet to be rendered
To determine preferential rights between 2 liens:
Kinds priority of registration of attachment.
1. Preliminary
2. Garnishment Tax Sale
3. Levy on execution Sale of land for collection of delinquent taxes and
penalties due to the government.
Registration of Attachment/Other Liens
1. Copy of writ in order to preserve any lien, right, Notes on Tax Sales
or attachment upon registered land may be filed 1. In personam (all persons interested shall be
with ROD where the land lies, containing the notified so that they may be given an opportunity
number of certificate of title of the land to be to be heard)
affected or description of the land 2. Notice to be given to delinquent taxpayer at his
2. ROD to index attachment in names of both last known address
plaintiff and defendant or name of the person for 3. Publication of notice must also be made in
whom property is held or in whose name stands English, Spanish, and local dialect, posted in a
in the records public and conspicuous place in the place where
3. If a duplicate of the certificate of title is not the property is situated and at the main entrance
presented: of the provincial building
• ROD shall, within 36 hours, send notice to 4. Sale cannot affect the rights of other lien holders
the registered owner by mail stating that unless given the right to defend their rights: due
there has been registration and request him process must be strictly observed
to produce a duplicate so that memorandum 5. A tax lien is superior to an attachment
may be made 6. There is no need to register a tax lien because it
• If the owner neglects or refuses to comply, is automatically registered once the tax accrues
the ROD shall report the matter to the court 7. But the sale of registered land to foreclose a tax
• The court, after notice, shall enter an order lien needs to be registered
to the owner to surrender the certificate at
Procedure of Registration of Tax Sale
the time and place named therein
1. Officer’s return shall be submitted to the ROD
4. Although notice of attachment is not noted in
together with the owner’s duplicate title
duplicate, notation in the book of entry of ROD
2. Register in the registration book
produces the effect of registration already.
3. The memorandum shall be entered in the
certificate as an adverse claim or encumbrance
Effects of Registration of Attachment (REEA)
1. Creates Real right 4. After the period of redemption has expired and
2. Has priority over Execution sale no redemption was made (2 years from
3. But between 2 attachments, one that is registration of auction sale), the title must be
registered Earlier is preferred canceled and a new title will be issued
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5. Before the cancellation, notice shall be sent to

the registered owner, with the directive that he
surrender title and show cause why it should not
be canceled
Other Parties Required to Register Involuntary

Dealings
1. Assignee in Involuntary Proceeding for
Insolvency (P.D. 1529, §83)
• It is the duty of the officer serving the notice
to file a copy of such notice to ROD where
the property of the debtor is located
• Assignee elected or appointed by the court
shall be entitled to entry of a new certificate
of registered land upon presentment of a
copy of assignment with the bankrupt's
duplicate certificate of title
• The new certificate shall state that it is
entered into by him as assignee or trustee in
insolvency proceedings
• Upon order vacating the insolvency
proceedings, any title issued in name of the
assignee shall be ordered surrendered and
the debtor shall be entitled to entry of new
certificate in his name.
2. Government in Eminent Domain (P.D. 1529,

§85)
• The expropriating body is required to file a
copy of the judgment in the eminent domain
proceeding within ROD, which states a
description of the property, certificate
number, interest expropriated, nature of
public use
• A memorandum shall be made on the
certificate or, if fee simple is taken, a new
certificate of title shall be issue
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F. NON-REGISTRABLE PROPERTIES
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An applicant for land registration should know what Subterranean or groundwaters;

properties or lands cannot be subject to private and
appropriation. Waters in swamps and
marshes
Note: The Land Registration Court has no jurisdiction PHIL. CONST., Forest or timberland, public
over non-registrable properties and cannot validly art. XII, §2. forest, forest reserves lands,
adjudge the registration of title in favor of the mineral lands
applicant for the registration of the same (Republic v.
Feliza, G.R. No. 182913, Nov. 20, 2013).
Jurisprudence (a) Mangrove swamps
Non-registrable properties • Foreshore land and
Basis Non-registrable property seashore
CIVIL CODE, art. Properties of public dominion • Navigable rivers, streams,
420
and creeks
Classifications:
(a) Those intended for public • Lakes and bays
use, such as roads, rivers, • Military reservations
torrents, ports, and • Other kinds of
bridges constructed by reservations (i.e.,
the State, banks, shores, reservations for specific
roadsteads, and others of purposes made by
similar character. executive proclamation)
(b) Those which belong to the • Watersheds
State, without being for • Grazing lands
public use, and are • Previously titled land
intended for: • Man-made alluvial
- public service or deposit along the river
- the development of the
national wealth. G. DEALINGS WITH UNREGISTERED
LANDS
WATER CODE The following belong to the
(P.D. 1067), State: Need for Registration (P.D. 1529. §113)
arts. 5 & 6 Rivers and their natural beds; No deed, conveyance, mortgage, lease, or other
Continuous or intermittent voluntary instrument affecting land not registered
waters of springs and brooks under the Torrens system shall be valid, except as
running in their natural beds between the parties thereto, unless such instrument
and the beds themselves; shall have been recorded in the manner herein
Natural lakes and lagoons; prescribed in the office of the Register of Deeds for
All other categories of surface the province or city where the land lies.
waters such as water flowing
over lands, water from rainfall The system of registration under the Spanish
whether natural or artificial, and Mortgage Law is discontinued and all lands recorded
water from agriculture runoff, under said system which are not yet covered by
seepage, and drainage; Torrens title shall be considered unregistered lands.
Atmospheric water;
Subterranean or groundwater;
System of Registration for Unregistered Lands
Seawater;
Before, the system of registration for unregistered
land under the Torrens System (Act 3344) only
Those found on private lands
covered voluntary dealings. Now, it includes
which also belong to the State:
involuntary dealings.
Continuous or intermittent
waters rising on such lands;
Effect: If prospective, it binds 3rd persons after
Lakes and lagoons naturally
registration but yields to better rights of 3rd person
occurring on such lands;
prior to registration (limited effect to 3rd parties)
Rainwater and falling on such
lands;
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It thus appears that the “better right” referred to in Act Spanish Mortgage Law. To hold otherwise, would
No. 3344 is much more than the mere prior deed of result in the anomalous situation of two registrations,
sale in favor of the first vendee. In the Lichauco case, one under Act 496 with respect to unimproved land,
it was the prescriptive right that had supervened. Or, and another, under Act 3344 for improvements
as also suggested in that vase, other facts and subsequently introduced on the same land. (Salita v.
circumstances exist which, in addition to his deed of Calleja, G.R. No. L-17314)
sale, the first vendee can be said to have better right
than the second purchaser. (Hanapol v. Plapil, G.R. Effect of Registration
No. L-19248, Feb. 28, 1963) Registration of an instrument involving unregistered
land in the Registry of Deeds creates constructive
Reason: No strict investigation involved notice and binds a third person who may
subsequently deal with the same property. (Heirs of
Subsequent dealings are also valid if recorded. ROD Deleste v. Land Bank, G.R. No. 169913, June 8,
keeps a daybook and a register, and an index system 2011)
is also kept.
The reliance on an unnotarized and unregistered
Procedure: deed of absolute sale of real property executed in
1) Presentation of instrument dealing with one’s favor is misplaced and unwarranted, for the
unregistered land; non-registration of the deed meant that the sale could
2) If found in order, the instrument is registered; not bind third parties. The transaction affecting
3) If found defective, the registration is refused. unregistered lands covered by an unrecorded
The reason for refusal will be written. contract, if legal, might be valid and binding on the
parties themselves, but not on third parties. In the
case of third parties, it was necessary for the contract
Under Act 3344, registration of instruments affecting to be registered. (Dadizon vs. Court of Appeals, G.R.
unregistered lands is without prejudice to a third party No. 15911, Sept. 30, 2009)
with a better right (Radiowealth Finance Co. v.
Palileo, G.R. No. 83432, May 20, 1991). Innocent purchasers of unregistered lands
An ordinary buyer may rely on the certificate of title
Registration of instruments affecting unregistered issued in the name of the seller. He or she need not
lands is “without prejudice to a third party with a better look beyond what appears on the face of the
right.” The aforequoted phrase has been held by this certificate of title. However, the defense of having
Court to mean that the mere registration of a sale in purchased the property in good faith may be availed
one’s favor does not give him any right over the land of only where registered land is involved and the
if the vendor was not anymore the owner of the land buyer had relied in good faith on the clear title of the
having previously sold the same to somebody else registered owner. It does not apply when the land is
even if the earlier sale was unrecorded. (Radiowealth not yet registered with the Registry of Deeds. (Heirs
Finance Company v. Palileo, G.R. No. 83432, May of Gregorio Lopez v. DBP., G.R. No. 193551, Nov.
20, 1991) 19, 2014).
If a parcel of land covered by a Torrens Title is sold, Vis-à-vis the Torrens System
but the sale is registered under Act 3344, and not A duly registered levy on attachment takes
under the Land Registration Act, the sale is not precedence over a prior unregistered sale. This is not
considered registered and the registration of the diminished by the subsequent registration of the prior
deed not operate as constructive notice to the whole sale. This is consistent with the fundamental principle
world. (Vda. de Melencion v. CA, G.R. No. 148846, of the Torrens system that registration is the
Sept. 25, 2007; Mactan-Cebu International Airport operative act that gives validity to the transfer or
Authority v. Spuses Edito, G.R. No. 171535, June 5, creates a lien upon the land. (Suntay v. Keyser
2009). Mercantile, Inc., 2014).
In order to be registerable under Act No. 3344, the
instrument must refer only to unregistered land and H. ASSURANCE FUND
its own improvements only, and not any other kind of
real estate or properties. The words “own” and “only” Assurance Fund
used in the language of the law when referring to Special fund created by P.D. 1529 to compensate a
improvements, clearly mean improvements on person who sustains loss or damage, or is deprived
unregistered lands alone. In fine, the deed cannot of land or interest therein, as a consequence of the
refer to improvements or buildings on lands bringing of the land under the operation of the
registered under the Torrens system, or under the Torrens system
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circumstances which should have put him on guard

The Assurance Fund was meant as a form of State and prompted him to investigate the property
insurance that allows recompense to an original title involved (Torres v. CA, 186 SCRA 679, 1990)
holder who, without any negligence on his part
whatsoever, has been apparently deprived of his land Who may file (Requisites)
initially by a usurper. The ordinary remedies against 1. A person who sustained loss or damage, or is
the usurper would have allowed the original title deprived land or any estate or interest therein
holder to recover his property. However, if the 2. Such loss, damage or deprivation was
usurper is able to transfer the same to an innocent occasioned by the bringing of the land under the
purchaser for value and he is unable to compensate
operation of the Torrens system or arose after
the original title holder for the loss, then the latter is
the original registration of the land
now left without proper recourse. As repeatedly
stated, the intent of the Assurance Fund is to 3. The loss, damage or deprivation was due to:
indemnify the innocent original title holder for his fraud, or any error, omission, mistake, or mis-
property loss, which loss is attributable to not only the description in any certificate of title or in any
act of a usurper but ultimately the operation of the entry or memorandum in the registration book.
Torrens System of registration which by reason of (Loss or damage should not be due to breach of
public policy, tilts the scales in favor of innocent trust or mistake in resurvey resulting in
purchasers for value. (Stilianopoulous vs. Register of expansion of area in certificate of title.)
Deeds of Legaspi City and the National Treasurer, 4. The aggrieved party was not negligent.
G.R. No. 224678, July 03, 2018)
5. He is barred under the provisions of P.D. 1529
or under the provisions of any law from
Contribution to the Assurance Fund (Sec. 93,
P.D. 1529) recovering such land;
6. The action has not prescribed.
A contribution to the fund, amounting to one-fourth
(1/4) of one percent (1%) of the land’s assessed Against whom filed (Sec. 96, P.D. 1529)
value shall be made in the following instances: If the loss, damage, or deprivation is wholly through
1. Upon the entry of a certificate of title in the name the fault, negligence, omission, mistake, or
of the registered owner misfeasance of the court personnel, the ROD or his
2. Upon the original registration on the certificate of deputies and employees: the action must be brought
against the ROD and the National Treasurer
title of a building or other improvements on the
land covered by said certificate
If the same is attributable to persons other than said
3. Upon the entry of a certificate pursuant to any officials, the action must be brought against the ROD,
subsequent transfer of registered land the National Treasurer, and such other persons.
The contribution shall be based on the assessed Where to file

value, according to the last assessment for taxation. Any court of competent jurisdiction: RTC in city where
If the land has not yet been assessed for taxation, its property lies or resident of plaintiff
value shall be determined by the sworn declaration
of two disinterested persons to the effect that the 2. LIMITATION OF ACTION
value fixed by them is to their knowledge, a fair
valuation, subject to modification by the courts.
Prescriptive Period (Sec. 102, P.D. 1529)
The action must be instituted within 6 years from the
1. ACTION OF COMPENSATION FROM issuance of the certificate of title. If the plaintiff is
FUNDS minor, insane or imprisoned, he has additional 2
years after disability is removed to file the action.
An action civil in character, which may be in the form
of an ordinary complaint for damages. Under the circumstances obtaining in Stilianopoulous
vs. Register of Deeds of Legaspi City and the
The person bringing the action for damages against National Treasurer, G.R. No. 224678, July 03, 2018,
the Fund must be the registered owner or holders of the period should be reckoned from the moment the
transfer certificates of title or innocent purchasers for innocent purchaser for value registers his or her title
value (La Urbana v. Bernardo, 62 Phil. 790, 1936) and upon actual knowledge thereof of the original title
holder/claimant.
This remedy is not available when the party seeking
compensation was negligent, as when there were
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Compensation and Execution (Secs. 97,99 P.D. and he shall mark the boundaries of the lands by
1529) monuments set-up in proper places thereon
Compensation cannot be more than the fair market 3. Cadastral survey
value of land at time of loss. 4. Filing of Petition
5. Publication (twice in successive issues of OG),
Amount to be recovered is not limited to P500,000
mailing, posting
which is maintained as standing fund. If fund is not
sufficient, National Treasurer is authorized to make 6. Filing of Answer
up for deficiency from other funds available to 7. Hearing of the case
Treasury even if not appropriated. 8. Decision
9. Issuance of the decree and certificate of title
Execution is first sought against the person
responsible for fraud; if he is insolvent, against the P.D. 1529 CADASTRAL
National Treasury. Thereafter, the Government shall Nature Voluntary Compulsory
be subrogated to the rights of plaintiff to go against Applicant Landowner Director of
other parties or securities. Lands
Lands 1. Usually All classes of
The Assurance Fund is only liable in the last resort, covered involves lands are
as suggested under Section 97 of Presidential private land included.
Decree No. 1529. The person causing the fraud or
2. It may also
the error should be liable first. However, if the
judgment cannot be executed, the Assurance Fund refer to public
is the insurance to the innocent purchaser for value agricultural
who relied on the validity of the real property’s lands if the
certificate of title. In showing that the person causing object of the
the fraud passed away and did not leave property, it action is
meant that the state cannot execute a judgment confirmation of
granting the innocent purchaser’s claim from such an imperfect
person. It excuses the claimant from impleading the title.
person causing the fraud or his estate in the Petition Parties Applicant and Government /
because in this situation, the judgment may only be opponent landowners
enforced against the Assurance Fund. (The Register must come to
of Deeds of Negros Occidental v. Anglo, Sr., G.R. No. court as
171804, August 5, 2015) claimants of
their own lands
Purpose Petitioner comes Government
I. CADASTRAL SYSTEM OF to court to confirm asks the court
REGISTRATION (Act No. 2259, as his title and seeks to settle and
amended) the registration of adjudicate the
the land in his title of the land
Cadastral Registration name
A proceeding in rem initiated by the filing of a petition A person Landowner Government
for registration by the government, not by the persons who
claiming ownership of the land subject thereof, and requests
the latter are, on the pain of losing their claim thereto, the survey
in effect, compelled to go to court to make known Effect of • No adverse If none of the
their claim or interest therein and to substantiate such judgment claim applicants can
claim or interest. • If the applicant prove that he is
fails to prove entitled to the
Procedure (NN-CP-PAHD-DI) land, the same
his title, his
1. Notice of cadastral survey published once in OG shall be
application declared public
and posted in a conspicuous place with a copy may be
furnished to the mayor and barangay captain (res judicata).
dismissed
2. Notice of date of survey by the Bureau of Land without
Management and posting in bulletin board of the prejudice (no
municipal building of the municipality or barrio, res judicata).
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Overview of Procedure
Cadastral Survey
Cadastral Petition
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Hearing
Judgment
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J. REGISTRATION THROUGH unless it is solely for a commercial, industrial,

ADMINISTRATIVE PROCEEDINGS educational, religious, or charitable purpose, or
(C.A. 141, as amended) right of way (subject to the consent of grantee
and approval of Secretary of Environment &
Registration Through Administrative Natural Resources)
Proceedings
Public lands suitable for agricultural purposes can be Exceptions:
disposed of by confirmation of imperfect or - Action for partition because it is not a conveyance
incomplete titles by administrative legalization (free - Alienations or encumbrances made in favor of the
patent). (CA 141, sec. 11) government
It shall be the duty of the official issuing the A homestead patent is a gratuitous grant from the
instrument of alienation, grant, patent or conveyance government "designed to distribute disposable
in behalf of the Government to cause such instrument agricultural lots of the State to land-destitute citizens
to be filed with the Register of Deeds of the province for their home and cultivation." Being a gratuitous
or city where the land lies, and to be there registered grant, a homestead patent applicant must strictly
like other deeds and conveyance, whereupon a comply with the requirements laid down by the law.
certificate of title shall be entered, and an owner’s Only lands of the public domain which have been
duplicate issued to the grantee. (PD 1529, Sec. 103) classified as public agricultural lands may be
disposed of through homestead settlement. The
Patents mere issuance of a homestead patent does not
A free patent is a mode of disposition of public automatically remove the land from inalienability and
agricultural land whereby an incomplete or imperfect convert it into alienable agricultural land.
title over a parcel of land is administratively legalized.
(CA 141, sec. 11) Before lands of the public domain may be the subject
of a homestead application, there must first be a
Title Issued Pursuant to Registration of Patent positive act of the government, declassifying a forest
Indefeasible when registered and deemed land and converting it into alienable or disposable
incorporated with Torrens system 1 year after the land for agricultural purposes. (Republic v. Heirs of
issuance of a patent. The court, in the exercise of its Daquer, G.R. No. 193657, Sep. 4, 2018.)
equity jurisdiction, may direct reconveyance even
without ordering the cancellation of title. Only public lands suitable for agricultural purposes
can be disposed by virtue of a homestead patent
General Rule: May not be opened 1 year after entry application. The rule is well-settled that an OCT
by LRA (otherwise, confusion and uncertainty on the issued on the strength of a homestead patent
government system of the distribution of public lands partakes of the nature of a certificate of title only
may arise and this must be avoided). when the land disposed of is really part of the
disposable land of the public domain. The open,
Exception: if it is annullable on the ground of fraud, exclusive and undisputed possession of alienable
then it may be reopened even after 1 year because public land for the period prescribed by law creates
registration does not shield bad faith. the legal fiction whereby the land, upon completion of
the requisite period, ipso jure and without the need of
Note: An OCT issued on the strength of a patent judicial or other sanction, ceases to be public land
partakes the nature of a certificate issued in a judicial and becomes private property. Open, exclusive and
proceeding. (Flores v. Bagaoisan, G.R. No. 173365, undisputed possession of public land for more than
Apr. 15, 2010) 30 years by a person in accordance with Section
48(b) of the Public Land Act creates the legal fiction
Homestead Restrictions: whereby the said land, upon completion of the
1. Land cannot be alienated within 5 years after requisite period of possession, ipso jure became
approval of the application for patent private property. (Heirs of Spouses Suyam v. Heirs
2. It cannot be liable for satisfaction of debt within 5 of Julaton, G.R. No. 209081, June 19, 2019)
years after approval of patent application
3. Subject to the repurchase of heirs within 5 years Erring Homesteader Not Barred by Pari Delicto
after a valid alienation (i.e., made after the - Pari delicto rule does not apply in void contracts
prohibitory period) - Violation of prohibition results in a void contract
4. No private corporation, partnership, association - Action to recover does not prescribe
may lease land subject of a homestead patent
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The State prohibits the sale or encumbrance of the provisions of Commonwealth Act No. 141 or the
homestead (PD 1529, sec. 116) within five years Public Land Act. (Taar v. Lawan, G.R. No. 190922,
after the grant of the patent. After those five years, Oct. 11, 2017)
the law impliedly permits alienation of the
homestead; xxx such alienation or conveyance Restriction on Alienation or Encumbrance of
(Section 117) shall be subject to the right of Lands Titled Pursuant to Patents
repurchase by the homesteader, his widow or heirs General Rule: Lands under free patents or
within five years (Morla v. Belmonte, G.R. No. homestead patents are prohibited from being
171146, Dec. 7, 2011.) alienated or encumbered.
A violation of the 5-year prohibitory period, as Exception: Allowed if done in favor of the
provided by the Public Land Act, would produce the government, within 5 years from and after the
effect of annulling and canceling the grant, title, issuance of the patent or grant. When a conveyance
patent, or permit originally issued, and cause the
is made within that period, the owner-vendor, his
reversion of the property and its improvements to the
State. However, for reversion to be declared by the widow, or heirs, may repurchase the same within 5
Court, an action for reversion must first be filed by years from the conveyance, such right cannot be
the Office of the Solicitor General. However, the waived (Republic v. Heirs of Felipe Alejaga, Sr., G.R.
defense of in pari delicto cannot be invoked in this No. 146030, Dec. 3, 2002)
case as the same is inapplicable when a public policy
will be violated. (Maltos v. Heirs of Borromeo, G.R. Despite the registration of the land and the issuance
No. 172720, Sep. 14, 2015.) of a Torrens title, the State may still file an action for
reversion of a homestead land that was granted in
Special Patent violation of the law. The action is not barred by the
A patent to grant, cede, and convey full ownership of statute of limitations. The State cannot be estopped
alienable and disposable lands formerly covered by by the omission, mistake, or error of its officials or
a reservation of lands of the public domain. agents. It may revert the land at any time, where the
concession or disposition is void ab initio. (Republic
The DENR, through the Reservation and Special v. Heirs of Daquer, G.R. No. 193657, Sep. 4, 2018)
Land Grants Section of the Land Management
Division, is tasked to issue special patents in favor of Homestead patents: Transfer or conveyance of any
government agencies pursuant to special laws, homestead after 5 years but before 25 years after the
proclamations, and executive orders. issuance of the title must be approved by the DENR
Secretary.
Procedure for Registration of Public Lands
(IFEFeeD)
Emancipation patents
1. Official Issues an instrument of conveyance
Lands acquired under emancipation patents issued
2. The instrument is Filed with ROD
to landless tenants and farmers must not be
3. The instrument is Entered in the books and the
alienated or encumbered within 10 years from the
owner’s duplicate is issued
issuance of the title.
- The instrument is only:
- A contract between the Government and the
A tenant-farmer who has fully complied with the
private person. It does not effect
requirements for a grant of title under PD 27 will be
conveyance unless registered. Registration
issued an Emancipation Patent by the DAR which
is the operative act that conveys or affects
may cover previously title or untitled property. (PD
land insofar as third persons are concerned.
1529, Sec. 105)
- Evidence of authority to the ROD to register.
4. Fees are paid by the grantee
The Register of Deeds shall complete the entries on
5. The land is Deemed registered under the
the aforementioned Emancipation Patent and shall
Torrens System upon issuance of the certificate
assign an original certificate of title number in case of
of title
unregistered land, and in case of registered property,
A judgment approving the subdivision of a parcel of shall issue the corresponding transfer certificate of
land does not preclude other parties with a better title without requiring the surrender of the owner’s
right from instituting free patent applications over it. duplicate of the title to be cancelled. (PD 1529, Sec.
Entitlement to agricultural lands of the public domain 105)
requires a clear showing of compliance with the
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The right and responsibilities of the beneficiary shall Note: A person with dual citizenship under R.A. 9225
commence from the time the DAR makes an award shall be considered a Filipino citizen. A person
of the land to him, which award shall be completed employed in distant locations, either foreign or
within 180 days from the time the DAR takes actual domestic, in public or private service, such that he is
possession of the land. Ownership of the beneficiary not able to stay at his place of residence for long
shall be evidenced by a Certificate of Land
periods, is deemed actual occupants.
Ownership Award, which shall contain the restrictions
and shall be recorded in the Register of Deeds
concerned and annotated on the Certificate of Title. Maximum Areas (R.A. 10023, Sec. 1)
(R.A. No. 6657, Sec. 24) Highly urbanized cities 200 sqm.
Other cities 500 sqm.
Conveyances by “non-Christian tribes”: May be First and second class
made only when the person so conveying can read 750 sqm.
municipalities
and understand the language in which the instrument Other municipalities 1000 sqm.
or deed is written. If such a person is illiterate, the
conveyance must be approved by the then Procedure (R.A. 10023 Sec. 3)
Commissioner of Mindanao and Sulu. 1. The application shall be filed with the CENRO,
with the following requirements:
Free patents: Agricultural free patent shall now be
(a) Approved survey plan or cadastral map;
considered as title in fee simple and shall not be
(b) Technical description of the land;
subject to any restriction on encumbrance or
(c) Sketch map showing adjacent lots, corners,
alienation. Any previous restrictions on agricultural
and natural or manmade features defining
free patents are now removed. However, this does
its boundaries;
not affect the right of redemption for transactions
(d) Affidavit of 2 disinterested barangay
made in good faith before March 9, 2019. (R.A.
residents attesting to the truth of the
11231)
statements in the application; and
(e) RTC certification that there is no pending
Free Patents to Residential Lands (R.A. 10023)
land registration case involving the land.
R.A. 10023 allows the granting of free patents to
2. The CENRO shall cause the posting of notices
untitled public alienable and disposable lands which
for 15 days in 2 conspicuous places in the
have been zoned as residential.
locality and shall process the application within
120 days.
Residential Lands (R.A. 10023, Sec 2)
(a) If disapproved for insufficient documents,
R.A. 10023 applies to all lands zoned as residential
the application may be refiled.
areas, including townsites as defined under the
(b) If approved, the records shall be forwarded
Public Land Act.
to the PENRO
3. The PENRO shall have 5 days to either approve
Zoned residential areas located inside a delisted
or disapprove the application.
military reservation or abandoned military camp, and
(a) If approved, the PENRO shall sign the
those of LGUS or townsites which preceded R.A.
patent and forward it to the RD for
7586 or the National Integrated Protected Areas
registration.
System (NIPAS) law, shall also be covered.
(b) If disapproved, the applicant may appeal to
the DENR Secretary.
Note: The LGU shall certify that these residential
lands are not needed for public use or public service.
Based on the testimony provided for by the DENR
CENRO all the requirements for the issuance of the
Qualifications (R.A. 10023, Sec. 1, 3) OCT covering lot No. 584 were duly complied without
Filipino citizens who are residents with continuous any kind of irregularity. This was further bolstered by
possession and actual occupation of residential the testimony of the land investigator who confirmed
land, either by himself or through his predecessor-in- the validity of Free Patent and OCT. At this juncture,
interest, under a bona fide claim of acquisition of the Court stresses that findings of fact by
ownership for at least 10 years before the filing of administrative agencies are generally accorded by
the application may apply for a Free Patent Title. the courts great respect, if not finality, by reason of
the special knowledge and expertise of said
administrative agencies over matters falling under
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their jurisdiction. It is not the task of the Court to once

again weigh the evidence submitted before and
passed upon by the administrative body and to
substitute its own judgment regarding sufficiency of
evidence. (Quinol v. Inocencio, G.R. No. 213517,
April 10, 2019)
No Prohibition Period (R.A. 10023, Sec. 5)

Unlike in a free patent and homestead patent granted
according to the Public Land Act, there is no
prohibition period and restrictions against the
encumbrance or alienation of the residential land
covered by free patents under R.A. 10023.
Special Patents under R.A. 10023

Public land actually occupied and used for public
schools, municipal halls, public plazas or parks, and
other government institutions for public use or
purpose may be issued special patents under the
name of the national agency or LGU concerned. All
lands thereby titled shall not be disposed of unless
sanctioned by Congress if owned by the national
agency or sanctioned by the sanggunian concerned
through an approved ordinance if owned by the LGU.
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Summary of Patents
TO WHOM
KINDS OTHER REQUIREMENTS
GRANTED
1. Grantee does not own more than 12 hectares of agricultural
land in the Philippines or has not had the benefit of any
gratuitous allotment of more than 12 hectares (§ 12)
To any Filipino 2. Must have resided continuously for at least 1 year in the
Homestead
citizen over the age
Patent municipality where the land is situated, or in the municipality
of 18 years or head
(C.A. 141) adjacent to the land (§ 14)
of a family
3. Must have cultivated at least 1/5 of the land continuously since
the approval of application (§ 14)
4. Payment of required fee (§ 14)
1. Order of priority in distribution:
a. agricultural lessees and share tenants;
b. regular farmworkers;
Emancipation Any qualified c. seasonal farmworkers;
Patent / farmer beneficiary d. other farmworkers;
Certificate of who must be a e. actual tillers or occupants of public lands;
Land landless resident of f. collectives or cooperatives of the above beneficiaries; and
Ownership the same barangay
g. others directly working on the land.
Awards (or in the absence
(CLOA) thereof, a landless 2. Landless (owns less than 3 has. of agricultural land)
(P.D. 27 & R.A. resident of the 3. A Filipino citizen
6657) same municipality) 4. At least 15 years of age or head of the family at the time of
acquisition of property
5. Has willingness, availability, and aptitude to cultivate and make
the land productive as possible.
1. Grantee does not own more than 12 hectares of land
2. Has continuously occupied and cultivated, either by himself or
Free Patent To any natural-born his predecessors-in-interest, tracts of disposable agricultural
(C.A. 141, as citizen of the public land for at least 20 years prior to the filing of an
amended by Philippines application for agricultural free patent
RA No. 11573)
3. Has paid real property taxes on the property while the same has
not been occupied by any person
Note: Grant will be limited to 12 hectares only

1. Maximum land area:
Highly urbanized cities 200 sqm
Other cities 500 sqm.
First and second class 750 sqm
municipalities
Other municipalities 1000 sqm
Residential
Any Filipino citizen 2. Land applied for is not needed for public service and/or public
Patent
who is an actual
(R.A. 10023) use, as certified by the LGU
occupant of a
residential land 3. Continuous possession and occupation of the land by the
A type of free applicant or his predecessor-in-interest, under a bona fide claim
patent of acquisition of ownership for at least 10 years before the filing
of the application for patent
Note: Zoned residential areas inside a delisted military reservation

or abandoned military camp, and those of LGUs or townsites,
preceding the National Integrated Protected Areas System (NIPAS)
law, are included
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1. To have at least 1/5 of the land broken and cultivated within 5

years from the date of the award
Citizens of the 2. Before any patent is issued, he must show actual occupancy,
Philippines of lawful cultivation, and improvement of at least one-fifth of the land until
age or head of the the date of final payment.
family may
3. For agricultural lands suitable for residential, commercial, or
purchase public
Sales Patent industrial purposes, a patent is issued only after:
agricultural land of
(C.A. 141) a. Full payment of purchase price, and
not more than 12
hectares b. Completion of the construction of permanent improvements
sold through public appropriate for the purpose for which the land is purchased
auction/sealed (must be completed within 18 months from date of award)
bidding
CADT refers to a title formally recognizing the rights of possession

and ownership of ICCs/IPs over their ancestral domains identified
and delineated in accordance with this law.
CALT refers to a title formally recognizing the rights of ICCs/IPs over

their ancestral lands.
2 modes of acquisition of CADTs and CALTs:

1. By Native Title of ICCs/IPs over both ancestral domains and
lands
2. By Torrens Title under Public Land Act and the Land
Registration Act (now Property Registration decree) over
Certificate of ancestral lands only:
Ancestral a. Continuous possession and occupation in the concept of an
To Indigenous
Domain Title
Community/People owner since time immemorial or for a period of not less than
(CADT) and
by the National 30 years of individually-owned ancestral lands by individual
Certificate of
Commission on members of cultural communities, by themselves or through
Ancestral
Indigenous People their predecessors-in-interest
Land Title
(NCIP) b. Claims are uncontested by the members of the same
(CALT)
(R.A. 8371) ICCs/IPs
c. Individually-owned ancestral lands must be agricultural in
character and are actually used for agricultural, residential,
pasture, and tree farming purposes for it to be classified as
alienable and disposable agricultural lands of the public
domain
d. The ancestral lands shall be classified as public agricultural
lands regardless of whether they have a slope of 18% or
more
e. Option to register ancestral land must be exercised within
(20) years from October 29, 1997 (approval date of the
IPRA)
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K. RECONSTITUTION OF TITLES Material facts to be shown:

1. That the certificate of title had been lost or
Reconstitution of Original Certificate of Title destroyed;
The restoration of the instrument which is supposed 2. That the documents presented by petitioner are
to have been lost or destroyed in its original form sufficient and proper to warrant reconstitution of
and condition. the lost or destroyed certificate of title;
3. That the petitioner is the registered owner of the
When the owner’s duplicate certificate of title has
property or had an interest therein;
not been lost but is in fact in the possession of
4. That the certificate of title was in force at the time
another person, then the reconstituted certificate is
void, because the court that rendered the decision it was lost or destroyed; and
had no jurisdiction. Reconstitution can validly be 5. That the description, area, and boundaries of the
made only in case of loss of the original certificate. property are substantially the same and those
(Alcazar v. Arante, G.R. No. 177042, Dec. 10, 2012) contained in the lost or destroyed certificate of
title (Republic v. Lorenzo, G.R. No.172338, Dec.
Purpose 10, 2012.)
To have the same reproduced, after proper
proceedings, in the same form they were when the Judicial Reconstitution
loss or destruction occurred (Heirs of Pedro Pinote
v. Dulay, G.R. No. L-56694, Jul. 2, 1990.) Requirements (LDR-FB)
1. The certificate of title had been lost or destroyed.
Kinds of Reconstitution: 2. The Documents presented by the petitioner are
1. Judicial
sufficient and proper to warrant reconstitution of
2. Administrative
the lost or destroyed certificate of title.  
Reconstitution v. Re-issuance of Lost Owner’s 3. The petitioner is the Registered owner of the
Duplicate Certificate property or had an interest therein.  
RECONSTITUTION RE-ISSUANCE 4. The certificate of title was in Force at the time it
WHAT IS LOST? was lost or destroyed.  
What is lost is the What is lost is the 5. The description, area, and Boundaries of the
original filed in the RD owner’s copy in property are substantially the same and those
vault possession of the contained in the lost or destroyed certificate of
owner title. (Heirs of Toring v. Heirs of Boquilaga, G.R.
No. 163610, Sep. 27, 2010, citing R.A. 26, § 2,
PUBLICATION 3, 12 and 13.)
Publication in the OG No OG publication
Note: The claimants must prove that a title had been
The court may require The court may issued and that said certificate of title was still in
you to also cause require you to also force at the time it was lost or destroyed. It is
publication in a cause publication in necessary that the RD issue a certification that such
newspaper of general a newspaper of was in force at the time of its alleged loss or
circulation general circulation destruction. The RD cannot issue such certification
ADMINISTRATIVE merely because of the dearth of records in its file.
There can be There is NO (Republic v. Heirs of Sps. Sanchez and Meneses,
administrative administrative re- G.R. No. 212388, Dec. 10, 2014.)
reconstitution issuance of new
owner’s duplicate In reconstitution proceedings, before jurisdiction
copy over the case can be validly acquired, it is a
condition sine qua non that the certificate of title has
not been issued to another person. If a certificate of
title has not been lost but is in fact in the possession
FURNISHING OF COPY
of another person, the reconstituted title is void and
OSG should be copy NO need to copy the court rendering the decision has not acquired
furnished furnished OSG jurisdiction over the petition for issuance of new title.
The courts simply have no jurisdiction over petitions
by (such) third parties for reconstitution of allegedly
lost or destroyed titles over lands that are already
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covered by duly issued subsisting titles in the names

of their duly registered owners. The existence of a
prior title ipso facto nullifies the reconstitution
proceedings. The proper recourse is to assail
directly in a proceeding before the regional trial court
the validity of the Torrens title already issued to the
other person. (Paulino vs. Curt of Appeals, G.R. No.
207533, June 4, 2014)
Tax declaration
The tax declaration does not serve as a valid basis
for reconstitution. For one, we cannot safely rely on
Tax Declaration No. 15003-816 as evidence of the
subject property being covered by TCT No. T-22868
in the name of respondent because a tax declaration
is executed for taxation purposes only and is
actually prepared by the alleged owner himself.
(Republic v. Santua, G.R. No. 155703, [September
8, 2008], 586 PHIL 221-300)
Summary of Process:
1. File a petition with the RTC (In rem proceeding).
2. The court shall cause a NOTICE to be
PUBLISHED, POSTED, and/or MAILED. Non-
compliance voids the proceeding as such
requirements are jurisdictional.
3. When the court grants the petition, it shall issue
a corresponding order to ROD
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Judicial Reconstitution Process
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Sources for Reconstitution (in order) of fraud. (Heirs of Spouses Ramirez v. Abon, G.R.
No. 222916, July 24, 2019.)
When OCT is to be reconstituted (R.A. 26, § 2.)
a. Owner’s duplicate of the certificate of title The requirement that the owner's duplicate
b. Co-owner’s, mortgagee’s or lessee’s duplicate certificate of title be presented for voluntary
of said certificate transactions is precisely what gives the registered
c. Certified copy of such certificate, previously owner "security" and "peace of mind" under the
issued by the ROD Torrens system. Without the owner's duplicate
d. Authenticated copy of the decree of registration certificate of title, transfers and conveyances and
agencies and trusts, while valid, will not bind the
or patent, as the case may be, which was the
registered land. Hence, a registered owner has a
basis of the certificate of title substantive right to own and possess the owner's
e. Deed of mortgage, lease, or encumbrance duplicate certificate of title and to replace the same
containing a description of the property covered in case of loss or destruction.
by the certificate of title and on file with the
ROD, or an authenticated copy thereof Also, if the loss of the certificate of title has been
indicating that its original had been registered proven, the court, after notice and hearing, should
f. Any other document which, in the judgment of direct the issuance of a new duplicate certificate in
the court, is sufficient and proper basis for its original form and condition, with a memorandum
reconstitution. of the fact that it is being issued in place of the lost
duplicate certificate. On the other hand, if the loss is
not proven, the court, after notice and hearing,
When TCT is to be reconstituted (R.A. 26, § 3.)
should dismiss the petition without prejudice to the
a. Same as sources (a), (b), and (c) for
registered owner's subsequent compliance with the
reconstitution of OCT requisites prescribed by law. Therefore, X
b. Deed of transfer or other document containing Corporation cannot be barred by res judicata from
a description of the property covered by TCT filing a second petition to replace its owner’s
and on file with the ROD, or an authenticated duplicate certificate of title in case of loss or
copy thereof indicating its original had been destruction of the original duplicate. (Philippine
registered and pursuant to which the lost or Bank of Communications v. Register of Deeds for
destroyed certificate of title was issued the Province of Benguet, G.R. No. 222958, March
c. Same as sources (e) and (f) for reconstitution 11, 2020.)
of OCT
Petitions for Reconstitution
In sum, RA 26 separates petitions for reconstitution
Section 109 of PD 1529 contemplates a situation of lost or destroyed certificates of title into two main
where when an owner's duplicate certificate of title groups with two different requirements and
is lost or destroyed, a person who is a transferee of procedures. Sources enumerated in Sections 2(a),
the ownership over the property, who is not 2(b), 3(a), 3(b), and 4(a) of RA 26 are lumped under
necessarily the registered owner, may also file the one group (Group A); and sources enumerated in
petition for reconstitution. In this situation, the Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), and 3(f) are
registered owner must also be duly notified of the placed together under another group (Group B). For
proceedings. By his or her very status as registered Group A, the requirements for judicial reconstitution
owner, the latter is an interested party in the petition are set forth in Section 10 in relation to Section 9 of
for reconstitution case. This is pursuant to the legal RA 26; while for Group B, the requirements are in
presumption that the registered owner is the owner Sections 12 and 13 of the same law. (Puzon v. Sta.
of the property, thus affording him preferential right Lucia Realty and Developent, Inc., G.R. No.
over the owner's duplicate, duly notifying him would 139518, March 6, 2001)
prevent a person who wrongfully purports to be the
owner of the property to commit fraud. It would offer
the registered owner sufficient opportunity to contest
the supposed interest of the person filing the petition
for reconstitution. The rule on the mandatory
notification of the registered owner in a petition for
reconstitution of a lost or destroyed owner's
duplicate certificate filed by another person who is
not the registered owner is to ensure an orderly
proceeding and to safeguard the due process rights
of the registered owner. It prevents the commission
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GROUP A GROUP B
SOURCES
1. The owner's duplicate of the certificate of title;

1. A certified copy of the certificate of title,
2. The co-owner's, mortgagee's, or lessee's duplicate previously issued by the register of deeds or
of the certificate of title; by a legal custodian thereof;
3. Annotations or memoranda appearing on the 2. An authenticated copy of the decree of
owner's co-owner's mortgagee's or lessee's registration or patent, as the case may be,
duplicate; pursuant to which the original certificate of title
was issued;
3. A document, on file in the registry of deeds, by
which the property, the description of which is
given in said document, is mortgaged, leased
or encumbered, or an authenticated copy of
said document showing that its original had
been registered;
4. Any other document which, in the judgment of
the court, is sufficient and proper basis for
reconstituting the lost or destroyed certificate
of title.
5. The deed of transfer or other document, on file
in the registry of deeds, containing the
description of the property, or an authenticated
copy thereof, showing that its original had
been registered, and pursuant to which the
lost or destroyed transfer certificate of title was
issued;
CONTENTS OF NOTICE AND PETITION
Contents of Notice (R.A. 26, § 9) Contents of Petition (R.A. 26, § 12)

1. Number of the certificate of title 1. That the owner’s duplicate of the certificate of
2. Name of the registered owner title had been lost or destroyed
3. Names of the interested parties appearing in the 2. That no co-owner’s, mortgagor’s, or lessee’s
reconstituted certificate of title duplicate had been issued
4. Location of the property 3. The location, area, and boundaries of the
5. The date on which all persons having an interest in property
the property must appear and file such claims as they 4. The nature and description of the buildings or
may have (Puzon v. Sta. Lucia, G.R. No. 139518, improvements, if any, which do not belong to
Sep. 17, 2001.) the owner of the land, and the names and
addresses of the owners of such buildings or
improvements
5. The names and addresses of the (a) occupants
or persons in possession of the property, (b) of
the owners of the adjoining properties, and (c)
of all persons who may have any interest in the
property
6. A detailed description of the encumbrance, if
any, affecting the property
7. A statement that no deeds or other instruments
affecting the property have been presented for
registration, or, if there be any, the registration
thereof has not been accomplished, as yet
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Contents of Notice (R.A. 26, § 13)

1. Number of the lost or destroyed certificate of
title, if known
2. Name of the registered owner
3. Names of the interested parties appearing in
the reconstituted certificate of title
4. Location of the property
5. The date on which all persons having any
interest therein must appear and file their claim
or objections to the petition.
PUBLICATION, POSTING, AND/OR POSTING
Publication & Posting Requirement (R.A. 26, § 9 Publication & Posting Requirement (R.A. 26, §
&10) 13)
1. Notice shall be published in two successive issues 1. Notice shall be published in two successive
of the Official Gazette; issues of the Official Gazette;
2. Must be posted on the main entrance of the 2. Must be posted on the main entrance of the
provincial building and of the municipal building of provincial building and of the municipal
the municipality or city where the land is situated. building of the municipality or city where the
land is situated.
These requirements must be complied with at least 30
days prior to the date of hearing. These requirements must be complied with at least
30 days prior to the date of hearing.
Registered Mail
The notice must be sent by registered mail or
otherwise, at the expense of the petitioner, to every
person named in said notice (actual occupants and
adjacent owners). This shall be done at least thirty
days prior to the date of hearing.
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Effect of Failure to Comply with Publication or Requisites (R.A. 6732, § 1.)

Posting Requirements 1. There is a substantial loss or destruction of the
If an order of reconstitution is issued without any original land titles due to fire, flood, or other
previous publication, such order of reconstitution is force majeure as determined by the
null and void. Even the publication of the notice of Administrator of the LRA
hearing in a newspaper of general circulation like 2. The number of certificates of title lost or
the Manila Daily Bulletin is not in substantial damaged should be at least 10% of the total
compliance with the law because Section 13 number in the possession of the Office of the
specifies publication in the OG and does not provide ROD; and
for any alternative medium or manner of publication 3. These lost or damaged titles should not be less
(MWSS v. Sison, G.R. No. L-40309, Aug. 31, 1983.) than 500.
The notice must be actually sent or delivered to Sources (R.A. 6732, § 2.)
parties affected by the petition for reconstitution. 1. Owner’s duplicate of the certificate of title
The order of reconstitution issued without 2. Co-owner’s, mortgagee’s, or lessee’s duplicate
compliance with the said requirement never of said certificate
becomes final - it was null and void (Manila Railroad
v. Moya, G.R. No. L-17913, Jun. 22, 1965.) LRA report
The LRA must submit a REPORT on or before the
Respondent, as possessor thereof, or as one who is date of hearing, indicating which of the lots subject
known to have an interest in the property, should of the reconstitution have already been issued titles
have been sent a copy of the notice at the expense and that, conversely, the Court, after considering the
of the petitioner, pursuant to section 13 of RA 26. It REPORT must render a Decision taking into
is clear from section 13 that notice by publication is consideration said Report. (Supreme Court
not sufficient under the circumstances. Notice must ADMINISTRATIVE CIRCULAR NO. 7-96)
be actually sent or delivered to parties affected by
the petition for reconstitution. The order of HOWEVER, non-compliance with this circular does
reconstitution, therefore, having been issued not divest the trial court of jurisdiction over the
without compliance with the said requirement, has petition for reconstitution.
never become final as it was null and void. (Manila
Railroad Company v. Moya, G.R. No. L-17913, June It is not mandatory, however, for the reconstitution
22, 1965) court to wait for such LRA Report indefinitely. If none
is forthcoming on or before the date of the initial
The failure to meet any of the necessary publication, hearing, it may validly issue an order or judgment
notice of hearing, and mailing requirements did not granting reconstitution. (Felicisimo Opriasa vs. The
City Government Of Quezon City, G.R. No. 149190,
vest jurisdiction of the case to the court. Thus, the
December 19, 2006 citing Puzon v. Sta. Lucia
judgment rendered by the RTC regarding the Realty & Development Inc)
reconstitution of title is void (Republic v. Sanchez,
G.R. No. 146081, Jul. 17, 2006.) The required quantum of evidence to reconstitute a
certificate of title is clear and convincing evidence.
For non-compliance with the actual notice In this case, the lower court granted the
requirement in Section 13 in relation to Section 12 reconstitution of titles on a mere preponderance of
of RA 26, the trial court did not acquire jurisdiction evidence. Additionally, the CA relied primarily on the
over the LRC Case. The proceedings in that case second LRA report to affirm the decision of
were thus a nullity and the order was void. reconstitution, but this was erroneous since both the
(Republic v. Spouses Roberto, G.R. No. 146081, first and second LRA reports had no probative
July, 17, 2006) value. This is because both reports do not fall within
the class of public documents under Section 23,
Administrative Reconstitution Rule 132 of the Rules since they do not reflect
Originally embodied in R.A. 26, abrogated through entries in public records made in the performance of
P.D. 1529, then partially revived through R.A. 6732. a duty by a public officer, are not certified copies or
authenticated reproductions of original official
R.A. 6732 provides for retroactive application records in the legal custody of a government office,
thereof to cases 15 years immediately preceding and are not even records of public documents. As
1989. such, without the testimonies of the public officers
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who issued them or who were custodians thereof, Finally, LRA Circular No. 35 requires that the RD
they are bereft of probative value. shall submit “written findings” of the status of the title
to be reconstituted. According to jurisprudence, the
Since jurisprudence, LRA Circular No. 35 and SC Certificate that Respondent X presented fails to
Administrative Circular No. 7-96 state that the LRA meet this requirement. Thus, this is another ground
must both submit its report and attend the hearing to dismiss Respondent X’s petition for
through one of their officials for the reconstitution of reconstitution. (Republic v. Manansala, G.R. No.
lost or destroyed certificates, the failure of the RTC 241890, May 3, 2021).
to comply with one of the requirements means that
the petition for reconstitution should be dismissed.
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Administrative Reconstitution Process
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Summary of Judicial and Administrative Reconstitution
-- end of topic --
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IV. PRACTICAL EXERCISES

A. DEMAND AND AUTHORIZATION
LETTERS
A. DEMAND AND AUTHORIZATION LETTERS 1. DEMAND LETTERS

1. Demand Letters
a. Relevant Provisions a. Relevant Provisions
b. Form: Demand Letter
2. Authorization Letters Those obliged to deliver or to do something incur in
a. Definition delay from the time the obligee judicially or
b. Form: Authorization Letter extrajudicially demands from them the fulfillment of
their obligation.
B. SIMPLE CONTRACTS
1. Lease and Sale However, the demand by the creditor shall not
a. Special Rules for Transactions
be necessary in order that delay may exist:
involving real property
b. Form: Contract of Sale and Lease a. When the obligation or the law
c. Form: Deed of Sale of Registered Real expressly so declare; or
Property b. When from the nature and the
d. Form: Deed of Sale of Personal circumstances of the obligation it
Property (Motor Vehicle) appears that the designation of the
e. Special Rules for Sale of Personal time when the thing is to be delivered
Property or the service is to be rendered was a
f. Form: Contract of Lease controlling motive for the establishment
C. COMPLAINT of the contract; or
1. Definition
c. When demand would be useless, as
2. Form: Complaint
D. JUDICIAL AFFIDAVIT when the obligor has rendered it
1. Definition beyond his power to perform.
2. Form: Judicial Affidavit
E. SPECIAL POWER OF ATTORNEY In reciprocal obligations, neither party incurs in
F. SUBSCRIPTION AGREEMENT delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfills
his obligation, delay by the other begins. (New Civil
Code, Art. 1169)
Unless otherwise stipulated, such action by the

lessor shall be commenced only after demand to
pay or comply with the conditions of the lease and
to vacate is made upon the lessee, or by serving
written notice of such demand upon the person
found on the premises if no person be found
thereon, and the lessee fails to comply therewith
after fifteen (15) days in the case of land or five (5)
days in the case of buildings. (Rules of Court, Rule
70, Sec. 2)
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b. Form: Demand Letter
[Letterhead]
April 21, 2022

Mr. Cardio Dalisay
101 CityScape Tower, Mandaluyong City
Re: [SUBJECT]
Dear Mr. Dalisay,
We are writing on behalf of our client, Mrs. Alicia Florrick (“Mrs. Florrick”).
Mrs. Florrick has informed us that: [insert summary of basic facts supporting your client’s
demand/cause of action].
We wish to inform you that your acts constitute clear violations of [insert applicable laws or
regulations violated by the addressee which give rise to a cause of action in your client’s favor].
Final demand is made upon you to pay Mrs. Florrick the sum of Fifteen Million Pesos
(Php15,000,000.00) within 15 days from your receipt of this letter. Otherwise, our client will be constrained
to file the appropriate actions against you in order to protect her rights.
We trust that you will give this demand your most urgent attention.
Yours,
Atty. Mike Ross
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2. AUTHORIZATION LETTER
a. Definition
An authorization letter is a written confirmation of a

person’s rank, authority or ability to enter a legally
binding contract, take a specific action, spend a
specified sum, or to delegate his or her duties and
powers. (Business Dictionary)
b. Form: Authorization Letter
April 21, 2022
THE BRANCH CLERK OF COURT

Regional Trial Court
Branch 143, City of Makati
Re: [SUBJECT]
To the Branch Clerk of Court:
This is to authorize my counsel, XXX Law Firm and its lawyers and apprentices, including but not limited
to Atty. Mike Ross, Atty. Harvey Specter, and Atty. Rachel Zane, to obtain copies of records pertaining to the
aforementioned case on my behalf.
For clarifications, you may reach me at 09176281727.
Thank you for your kind consideration.
Very Truly Yours,
[insert signature]
Corona V. Irus
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B. SIMPLE CONTRACTS
a. The transaction must be contained in a
1. LEASE AND SALE public instrument
b. The instrument must be signed by the
a. Special Rules for Transactions person/s executing the same in the
presence of at least two witnesses, who
Involving Real Property
shall likewise sign it
c. The instrument must be acknowledged to
For transactions involving real rights to be be the free act and deed of the person/s
enforceable, they must be in writing and subscribed executing the same before a notary public
by the parties charged. As a general rule, evidence or other authorized public officer
of the agreement cannot be received without the d. Where the instrument consists of two or
writing. (Civil Code, Art. 1403 (2) (e)) more pages, including the page whereon
acknowledgment is written, each page of
A contract involving real rights which is in writing and the copy which is to be registered, except
subscribed by the parties, but is not found in a public the page where the signatures already
instrument, is valid. Thus, as a general rule, a appear at the foot of the instrument, shall
defective notarization does not affect the validity of be signed on the left margin by the person/s
executing the instrument and their
a contract. However, the instrument becomes a
witnesses, and all the pages sealed with
private instrument which must be proved following the notarial seal, and this fact as well as the
the rules in Sections 20-22 of Rule 132 of the Rules number of pages shall be stated in the
of Court. (Teoco v. Metrobank, G.R. No. 162333, acknowledgment.
2008) e. Where the instrument acknowledged
relates to a sale, transfer, mortgage or
For deeds, conveyances, encumbrances, encumbrance of two or more parcels of
discharges, powers of attorney and other voluntary land, the number thereof shall likewise be
instruments involving real property to be registrable set forth in said acknowledgment. (P.D.
with the Register of Deeds, the Property 1529, Sec. 112)
Registration Decree requires the following:
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b. Form: Contract of Sale and Lease
[NAME OF CONTRACT]
KNOW ALL MEN BY THESE PRESENTS:
This [Name of Contract] (“Agreement”) is entered into this [day] day of [Month] [Year] at [Place], between:
[FIRST PARTY]
and
[SECOND PARTY]
(The First Party and the Second Party are hereinafter collectively referred to as the “Parties”)
WITNESSETH: That –
WHEREAS:
A.
B.
C.
NOW, WHEREFORE, premises considered, the Parties hereby agree as follows:
[BODY OF CONTRACT]
IN WITNESS WHEREOF, the Parties have entered into this Agreement on the day and the year first above
written.
By: By:
___________________________ ___________________________
FIRST PARTY SECOND PARTY
Witnessed by:
_____________________________ _____________________________
[INSERT ACKNOWLEDGMENT]
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c. Form: Deed of Sale of Registered Real Property
DEED OF ABSOLUTE SALE
This Deed of Absolute Sale (“Deed”) is entered into this [day] of [Month] [Year] at [Place], between:
[FIRST PARTY/SELLER]
and
[SECOND PARTY/BUYER]
(the First Party and the Second Part are hereinafter collectively referred to as the “Parties”)
WHEREAS:
1. SEELLER is the registered owner in fee simple of a parcel of land with improvements covered by
[Transfer or Original Certificate] Title No. [XX], issued by the Register of Deeds of
[City/Municipality] (the “Property”); and
2. BUYER intends to buy the Property.
3. The SELLER shall SELL, TRANSFER, and CONVEY absolutely and unconditionally to BUYER the
Property together with the buildings and improvements thereon situated in the City of Makati, and
more particularly described as follows:
[Technical Description of property; specify metes and bounds of the property with approximate area
thereof, as indicated on the face of the title]
4. The BUYER shall pay for the Property the amount of [AMOUNT IN WORDS] PESOS (PhP XXX.00)
upon execution of this Deed of Absolute Sale.
5. The BUYER shall bear all expenses for the transfer of the title of the Property in his name.
IN WITNESS WHEREOF, the parties have signed this contract on this __th day of [Month] [Year] at [Place of
Signing]
By: By:
[NAME OF SELLER] [NAME OF BUYER]

SELLER BUYER
Note: If the Buyer and/or Seller is married, marital consent must be
secured; thus, the Deed must also indicate this. Hence, add the following:
With my consent:
NAME OF SPOUSE OF BUYER/SELLER

Seller(Buyer)’s Wife/Husband
SIGNED IN THE PRSENCE OF
[WITNESS 1 NAME] [WITNESS 2 NAME]
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Note: If the instrument conveys 2 or more parcels of

land, pursuant to the Property Registration Decree,
include the following after the first paragraph in the
acknowledgment:
This instrument relates to the sale (or mortgage) of

2 parcels of land, and consists of 2 pages including
the page on which this acknowledgment is written,
each and every page of which, on the left margin,
having been signed by [SELLER] and her
witnesses, and sealed with my Notarial seal.
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d. Form: Deed of Sale of Personal Property (Motor Vehicle)
DEED OF ABSOLUTE SALE

OF A MOTOR VEHICLE
This Deed Of Absolute Sale (the “AGREEMENT”) is made and executed into this [day] of [Month] [Year] at
[Place], by and between:
ELON MUSKETEER Filipino, of legal age, married, and with address at [Address
(“SELLER”)
And
BANG HYUNGA, Filipino, of legal age, married, and with address at [Address],
(“BUYER”)
WHEREAS:
A. SELLER is the registered owner of a motor vehicle in fee simple as shown by Certificate of
Registration No. [xxx], a copy of which is hereto attached as Annex “A” and specifically described as
follows:
MAKE: ENGINE NO:
SERIES: SERIAL/CHASIS NO.:
TYPE OF BODY: PLATE NO.:
YEAR MODEL: FILE NO.:
B. BUYER intends to buy the Motor Vehicle.

1. The SELLER hereby sells, assigns, conveys, and transfers absolutely and unconditionally unto the
BUYER the Motor Vehicle, and the BUYER accepts the same, on an as-is-where-is basis;
2. The BUYER shall pay for the Motor Vehicle the amount of [INSERT AMOUNT IN WORDS] PESOS
(PhP XXX.00) upon execution of this Deed of Absolute Sale;
3. The BUYER shall bear all expenses for the execution and registration of this Deed of Absolute Sale.
IN WITNESS WHEREOF, the parties have signed this contract on this __th day of [Month] [Year] at [Place of
Signing]
By: By:
ELON MUSTKEETEER BANG HYUNGA

SELLER BUYER
Note: If the Buyer and/or Seller is married, marital consent must be
secured; thus, the Deed must also indicate this. Hence, add the following:
With my consent:
NAME OF SPOUSE OF BUYER/SELLER

Seller(Buyer)’s Wife/Husband
SIGNED IN THE PRSENCE OF
[WITNESS 1 NAME] [WITNESS 2 NAME]
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e. Special Rules for Sale of

Personal Property
General Rule: An agreement for the sale of goods,

chattels, or things in action, at a price not less than
P500, must be in writing, or else it is unenforceable.
(Civil Code, Art. 1403 (2) (d))
Exceptions:
a. If the buyer accepts and receives part of
such goods and chattels, or the evidences,
or some of them, of such things in action or
pay at the time some part of the purchase
money, the contract becomes enforceable.
b. When a sale is made by auction and entry
is made by the auctioneer in his sales book,
at the time of the sale, of the amount and
kind of property sold, terms of sale, price,
names of the purchasers and person on
whose account the sale is made, then the
sale is also enforceable. (Civil Code, Art.
1403 (2) (d)
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f. Form: Contract of Lease
CONTRACT OF LEASE
This Agreement is made and entered into at the City of Makati, this __th day of [MONTH], [YEAR],
by and between:
GANDARA PARK, of legal age, married to CARDIO DALISAY (LESSOR), and resident of Makati City,
and
CHAROT SANTOS, of legal age, single and resident of Quezon City (LESSEE)
WITNESSETH that:
1. In consideration of a monthly rental of [AMOUNT IN WORDS] PESOS (PhP XXX.00) and the
covenants made below,
the LESSOR hereby LEASES to the LESSEE an apartment located at [ADDRESS] covered
by Transfer Certificate of Title/Condominium Certificate of Title (for condominium units) No. [XXX] for a
period of TWELVE (12) MONTHS from signing of this contract.
2. The LESSEE covenants, as follows:
2.1. To pay the rentals on or before the fifth day of each month, without need of demand at the
residence of LESSOR;
2.2. To keep the premises in good and habitable condition, making the necessary repairs inside
and outside the house;
2.3. Not to make major alterations and improvements without the written consent of the LESSOR
and in the event of such
unauthorized major alterations and improvements, surrendering ownership over such
improvements and alterations to the
LESSOR upon expiration of this lease;
IN WITNESS WHEREOF, the parties have signed this contract on the __th day of [MONTH] [YEAR]
in [PLACE OF SIGNING].
(sgd.) (sgd.)
GANDARA PARK CHAROT SANTOS
Lessor Lessee
With my consent:
(sgd.)
CARDIO DALISAY
SIGNED IN THE PRESENCE OF:
_____________________________ _____________________________
WITNESS 1 WITNESS 2
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g. Special Rules for Contract of C. COMPLAINT

Lease:
1. DEFINITION
There are two instances when a contract of lease
must be in writing and subscribed by the parties Complaint: pleading alleging the plaintiff’s cause or
charged to be enforceable: (1) when the contract causes of action. The names and residences of the
lasts for a period of more than one year and (2) plaintiff and defendant must be stated in the
complaint
when the transaction involves real rights. (Civil
Code, Art. 1403 (2) (e))
2. FORM: COMPLAINT
REPUBLIC OF THE PHILIPPINES

[COURT]
[JUDICIAL REGION]
[CITY/PROVINCE], BRANCH __
[NAME]
Plaintiff,
Civil Case No. ______________

- versus -
For: _______________________
[NAME]
Defendant.
x------------------------------------------------------------------------------------------x
COMPLAINT
[Name] (“Plaintiff”), by counsel, respectfully states:
PARTIES
1. Plaintiff is [provide details]. Plaintiff may be served with orders and other court processes in
the address of the undersigned counsel.
2. Defendant is [provide details], where it can be served with summons and other court
processes.
ALLEGATIONS COMMON TO ALL CAUSES OF ACTION
[state relevant and material facts; refer to affidavits and documentary/object evidence] 5
FIRST CAUSE OF ACTION:

[DESCRIBE HERE]
5
A copy of the _______________ is attached as Annex __.
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1. Plaintiff repleads the foregoing allegations.
2. [state legal basis of claim; show that plaintiff has cause of action based on the relevant facts]
SECOND CAUSE OF ACTION:

[DESCRIBE HERE]
1. Plaintiff repleads the foregoing allegations.
2. [state legal basis of claim; show that plaintiff has cause of action based on the relevant facts]
In support of the instant complaint, Plaintiff intends to present the following witnesses, whose judicial
affidavits are attached herein:
3. [Name of witness] – The witness will testify that [substance of the testimony of the witness].
PRAYER
WHEREFORE, plaintiff respectfully prays that [state relief here].
Plaintiff prays for other just and equitable relief.
[place, date].
[counsel’s details]
PAGE 461 OF 466
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D. JUDICIAL AFFIDAVIT
1. DEFINITION
Affidavits submitted by the parties which shall take

the place of their witnesses' direct testimonies (A.M.
No. 12-8-8-SC, Sec. 2).
2. FORM: JUDICIAL AFFIDAVIT
Republic of the Philippines

REGIONAL TRIAL COURT
National Capital Judicial Region
City of Manila
Branch 45
PEOPLE OF THE PHILIPPINES,
Plaintiff,
-versus- Criminal Case No. 12345
JOHN LLOYD DELA CRUZ For: Estafa
Accused
x ----------------------------------------------- x
JUDICIAL AFFIDAVIT
(of Prosecution witness JOHN LLOYD DELA CRUZ in lieu of Direct Testimony)
OFFER OF TESTIMONY:
The testimony of the witness John Lloyd dela Cruz is being offered to prove that he is an eyewitness
to the crime of Estafa. He will testify what he saw the day of their transaction with the accused and what later
transpired in their agreement dated July 22, 2016. The witness will identify the accused in open court as the
person who committed the crime as well as documents in the course of his testimony.
I, JOHN LLOYD DELA CRUZ, 44 years old, employed as a businessman, residing at #123, 1st Street, San
Miguel, Manila, after having been duly sworn in accordance with law; hereby depose and state:
PRELIMINARY STATEMENT
The person examining me is ATTY. LIZA SOBRANGANO with law office address at #123, 1st
Street, Mendiola, Manila. My Judicial affidavit is being taken at the above-mentioned place in the presence
of John Sy and my companions.
The questions are asked in the English Language but are translated in the Tagalog dialect which I
speak and fully understand. I am giving my answers fully conscious that I do so under oath and I am aware
that I may face criminal liability for false testimony or perjury for false statements made or given by me.
1. Q: Mr. Witness, will you please tell the Honorable Court your name, age and other
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personal circumstances?
A: I am John Lloyd dela Cruz, 44 years old, a businessman, and a resident of #123, 1st
Street, San Miguel, Manila.
2. Q: What is the nature of your business?
A: I am engaged in the buying and selling of jewelries.
3. Q: How long did you endeavor your business?
A: It started in 2006 sir.
4. Q: Do you know the accused in this case, Pedro Santos?
A: Yes, I know him.
5. Q: How do you know Pedro Santos, the accused?
A: He is one of my agents in the jewelry business
IN WITNESS WHEREOF. I have hereunto set my hand this 19th day of April, 2020 in Manila,
Philippines.
(Sgd.) John Lloyd dela Cruz

Affiant
SUBSCRIBED AND SWORN to before me this _________________ at _______________. I have identified

affiant through his _______________ issued at _______________ on ______________ bearing his photograph and
signature.
ATTESTATION
I, __________, of legal age, Filipino, and with office address at __________, under oath and state that:
. I conducted the examination of witness, __________, on __________, in connection with the above-captioned
case.
I faithfully recorded or caused to be recorded the questions that I asked and the answers that the witness gave as
stated in his judicial affidavit.
3. Neither I nor any other person present or assisting the witness coached him regarding his answer stated in his
Judicial Affidavit.
(Sgd.) John Lloyd dela Cruz

Affiant
SUBSCRIBED AND SWORN to before me this ______________ at _____________, affiant personally

appeared and exhibited to me his Philippine Driver’s License Identification Card with I.D. No. __________ and
bearing her photograph and signature.
PAGE 463 OF 466
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E. SPECIAL POWER OF ATTORNEY
GENERAL POWER OF ATTORNEY

KNOW ALL MEN THESE PRESENTS:
I, John Lloyd dela Cruz of legal age, married to Vea Alonso, Filipino, a resident of #123, 1st Street,
San Miquel, Manila, do hereby name, constitute, and appoint Ellena Darna, to be my true and lawful attorney,
for me and in my name, place, and stead, to do and perform the following acts and things to wit:
To have, sue, and to take any all lawful ways and means for the recovery thereof by suit,
attachment, compromise or otherwise:
To delegate in whole or in part any all of the powers herein granted or conferred, by means of an
instrument in writing, favor of any third persons whom my said attorney may select;
HEREBY GIVING AND GRANTING unto my said attorney full power and authority whatsoever
requisite or necessary or proper to be done in and about the premises as fully to all intents and
purposes as I might and could lawfully do if. personally present, with power of substitution and
revocation, and hereby, ratifying and confirming all that my said attorney or his substitute shall
lawfully do or cause to be done under and by virtue of these presents.
IN WITNESS WHEREOF. I have hereunto set my hand this 19th day of April, 2020 in Manila,
Philippines.
(Sgd.) John Lloyd dela Cruz (Sgd.) Ellena Darna

Principal Attorney-in-fact
Signed in the presence of:

(Sgd.) Vea Alonso (Sgd.) Maja Blanca Salvador
Witness. Witness
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F. SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
That the undersigned, CORONA V. IRUS, Filipino, and with address at [ADDRESS] (the “SUBSCRIBER”)
hereby subscribes to Five Thousand (5,000) shares of the common capital stock of ABC Corporation
(the “CORPORATION”), a corporation duly organized and existing under the laws of the Philippines, and
with address at [OFFICE ADDRESS], at a subscription price of PhP 100.00 per share, or a total
subscription price of PhP 500,000.00, payable as follows:
1. 300,000 upon execution of this Agreement;

2. 100,000 on 6th of May 2018;
3. 100,000 on 6th of May, 2019.
Except as otherwise indicated above, subscriptions shall be payable at any time upon call by the Board of
Directors of the CORPORATION. Subscriptions not paid on due date shall be subject to interest at 6%
per annum from due date until fully paid, without prejudice to the right of the CORPORATION to declare
the same delinquent in accordance with the Revised Corporation Code of the Philippines and to all other
rights available to the CORPORATION under the law.
IN WITNESS WHEREOF, the parties have caused these presents to be signed on the __th day of [MONTH]
[YEAR] at [PLACE OF SIGNING].
ABC CORPORATION: SUBSCRIBER:

________________________ _______________________
SWIN E. FLU CORONA V. IRUS
Corporate Secretary TIN 12345
TIN 12345
SIGNED IN THE PRESENCE OF:
_____________________________ _____________________________
WITNESS 1 WITNESS 2
-- end of topic --
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PI14B PIFA14BA1

PART I: CIVIL LAW I ............................................................................................................................ 18

I. PRELIMINARY TITLE .................................................................................................................... 18

A. EFFECT AND APPLICATION OF LAWS .................................................................................... 18

II. PERSONS AND FAMILY RELATIONS.............................................................................................. 29

3. ABSOLUTE COMMUNITY OF PROPERTY ................................................................................ 49

III. SUCCESSION ............................................................................................................................... 76

A. GENERAL PROVISIONS ......................................................................................................... 76

IV. OBLIGATIONS AND CONTRACTS ................................................................................................ 132

A. OBLIGATIONS .................................................................................................................... 132

B.LOSS OF DETERMINABLE THING DUE OR IMPOSSIBILITY OR DIFFICULTY OF

A. NATURE AND FORM .......................................................................................................... 188

1. ABSOLUTE INCAPACITY......................................................................................................... 196

VI. LEASE........................................................................................................................................ 214

A. GENERAL PROVISIONS ....................................................................................................... 214

VII. PARTNERSHIP ........................................................................................................................... 220

A. GENERAL PROVISIONS ....................................................................................................... 220

1. RIGHTS AND OBLIGATIONS OF THE PARTNERSHIP .............................................................. 224

VIII. AGENCY .................................................................................................................................... 238

A. DEFINITION OF AGENCY..................................................................................................... 238

IX. CREDIT TRANSACTIONS............................................................................................................. 257

A. LOAN ................................................................................................................................. 257

X. TORTS AND DAMAGES .............................................................................................................. 284

A. TORTS ............................................................................................................................... 284

G.TEACHERS/HEADS OF ESTABLISHMENT OF ARTS AND TRADES FOR THEIR PUPILS/

PART II: CIVIL LAW II (AND PRACTICAL EXERCISES) ........................................................................... 308

I. PROPERTY ................................................................................................................................ 308

A. CLASSIFICATION OF PROPERTY .......................................................................................... 309

E. USUFRUCT ......................................................................................................................... 336

3. PRESCRIPTION/NON-PRESCRIPTION OF ACTION ................................................................. 366

II. CREDIT TRANSACTIONS............................................................................................................. 373

A. PERSONAL PROPERTY SECURITIES (R.A. 11507).................................................................. 373

III. LAND TITLES & DEEDS ............................................................................................................... 393

A. TORRENS SYSTEM; GENERAL PRINCIPLES ........................................................................... 393

IV. PRACTICAL EXERCISES ............................................................................................................... 450

A. DEMAND AND AUTHORIZATION LETTERS .......................................................................... 450

C. FORM: DEED OF SALE OF REGISTERED REAL PROPERTY ............................................ 455

PART I: CIVIL LAW I

I. PRELIMINARY TITLE 1. WHEN LAW TAKES EFFECT

2. If there is lack of/absence of full

WHEN IS PUBLICATION NOT REQUIRED

EXCEPTIONS: Right - A legally enforceable claim of one person

Waivers are not presumed but must be clearly and

TYPES OF REPEAL When Judicial Decisions Deemed Part of the

DUTY OF JUDGES Note: Art. 13 has been impliedly

BUT: Even a legislator, through Art. 9, recognizes Night Sunset to sunrise

When Applicable The first day, which is Feb. 3, 1988, is excluded

Note: Consuls do not enjoy the privilege of

Laws Governing Property (Real and Personal) Prohibitive Laws

SUMMARY OF PROVISIONS ON CONFLICTS OF LAW

LAW MATTERS/ GOVERNING PRINCIPLE/ DOCTRINE

1) Capacity to succeed (CIVIL CODE, Art. 1039.);

Note: The enumeration is governed by the national law of

B. HUMAN RELATIONS Exception: When one party has already made

Requisites/Elements: Unjust Enrichment / Accion in rem verso (Art.

General Rule: Where both a civil and a criminal

II. PERSONS AND FAMILY d. Instances and effects of rescission

D. RIGHTS AND OBLIGATIONS

E. PROPERTY RELATIONS BETWEEN

G. PATERNITY AND FILIATION

A. PERSONS If nothing has been specified on this point, the

dishonor or extremely difficult to write or Who is the preferred representative?

Same rule applies when under similar

b. Presumptive death of absent The well-founded belief in the absentee’s death